Earnings Miss: Rhong Khen International Berhad Missed EPS By 27% And Analysts Are Revising Their Forecasts

Rhong Khen International Berhad (KLSE:RKI) missed earnings with its latest annual results, disappointing overly-optimistic forecasters. Results showed a clear earnings miss, with RM522m revenue coming in 8.6% lower than what the analystsexpected. Statutory earnings per share (EPS) of RM0.063 missed the mark badly, arriving some 27% below what was expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Rhong Khen International Berhad

After the latest results, the twin analysts covering Rhong Khen International Berhad are now predicting revenues of RM573.1m in 2025. If met, this would reflect a decent 9.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 58% to RM0.099. In the lead-up to this report, the analysts had been modelling revenues of RM590.0m and earnings per share (EPS) of RM0.10 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the RM1.47 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that Rhong Khen International Berhad is forecast to grow faster in the future than it has in the past, with revenues expected to display 9.9% annualised growth until the end of 2025. If achieved, this would be a much better result than the 4.9% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 13% per year. So although Rhong Khen International Berhad's revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Rhong Khen International Berhad going out as far as 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Rhong Khen International Berhad that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.