As you might know, Lao Feng Xiang Co., Ltd. (SHSE:600612) last week released its latest full-year, and things did not turn out so great for shareholders. Results look to have been somewhat negative - revenue fell 3.3% short of analyst estimates at CN¥71b, and statutory earnings of CN¥4.23 per share missed forecasts by 4.2%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the most recent consensus for Lao Feng Xiang from 13 analysts is for revenues of CN¥79.8b in 2024. If met, it would imply a notable 12% increase on its revenue over the past 12 months. Per-share earnings are expected to swell 15% to CN¥4.86. In the lead-up to this report, the analysts had been modelling revenues of CN¥83.5b and earnings per share (EPS) of CN¥5.03 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
Despite the cuts to forecast earnings, there was no real change to the CN¥72.19 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Lao Feng Xiang at CN¥88.36 per share, while the most bearish prices it at CN¥48.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Lao Feng Xiang'shistorical trends, as the 12% annualised revenue growth to the end of 2024 is roughly in line with the 9.9% annual growth 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 revenues grow 16% per year. So it's pretty clear that Lao Feng Xiang is expected to grow slower than similar companies in the same industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Lao Feng Xiang. 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. The consensus price target held steady at CN¥72.19, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Lao Feng Xiang. Long-term earnings power is much more important than next year's profits. We have forecasts for Lao Feng Xiang going out to 2025, and you can see them free on our platform here.
You can also see our analysis of Lao Feng Xiang's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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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.
