As you might know, Shenzhen SED Industry Co., Ltd. (SZSE:000032) recently reported its full-year numbers. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥56b, statutory earnings beat expectations 8.9%, with Shenzhen SED Industry reporting profits of CN¥0.29 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the three analysts covering Shenzhen SED Industry are now predicting revenues of CN¥62.4b in 2024. If met, this would reflect a notable 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 53% to CN¥0.44. Before this earnings report, the analysts had been forecasting revenues of CN¥63.7b and earnings per share (EPS) of CN¥0.46 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.
It'll come as no surprise then, to learn that the analysts have cut their price target 11% to CN¥24.00.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Shenzhen SED Industry's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past five years. Compare this to the 107 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 11% per year. So it's pretty clear that, while Shenzhen SED Industry's revenue growth is expected to slow, it's expected to grow roughly in line with 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. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Shenzhen SED Industry's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Shenzhen SED Industry 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 2 warning signs for Shenzhen SED Industry 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.