Last week, you might have seen that Tongfu Microelectronics Co.,Ltd (SZSE:002156) released its full-year result to the market. The early response was not positive, with shares down 3.5% to CN¥20.50 in the past week. Revenues of CN¥22b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of CN¥0.11 an impressive 31% ahead of estimates. 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 Tongfu MicroelectronicsLtd from 14 analysts is for revenues of CN¥26.5b in 2024. If met, it would imply a solid 19% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 405% to CN¥0.56. Before this earnings report, the analysts had been forecasting revenues of CN¥26.5b and earnings per share (EPS) of CN¥0.56 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of CN¥25.09, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Tongfu MicroelectronicsLtd, with the most bullish analyst valuing it at CN¥30.00 and the most bearish at CN¥21.60 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. It's pretty clear that there is an expectation that Tongfu MicroelectronicsLtd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 19% growth on an annualised basis. This is compared to a historical growth rate of 26% over the past five years. Compare this to the 213 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 22% per year. Factoring in the forecast slowdown in growth, it looks like Tongfu MicroelectronicsLtd is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Tongfu MicroelectronicsLtd analysts - going out to 2026, 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 Tongfu MicroelectronicsLtd (1 doesn't sit too well with us!) 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.