The analysts might have been a bit too bullish on Sineng Electric Co.,Ltd. (SZSE:300827), given that the company fell short of expectations when it released its yearly results last week. Unfortunately, Sineng ElectricLtd delivered a serious earnings miss. Revenues of CN¥4.9b were 11% below expectations, and statutory earnings per share of CN¥0.81 missed estimates by 29%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

After the latest results, the dual analysts covering Sineng ElectricLtd are now predicting revenues of CN¥7.16b in 2024. If met, this would reflect a substantial 45% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 97% to CN¥1.57. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥8.95b and earnings per share (EPS) of CN¥1.94 in 2024. Indeed, we can see that the analysts are a lot more bearish about Sineng ElectricLtd's prospects following the latest results, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.

What's most unexpected is that the consensus price target rose 13% to CN¥39.25, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 45% growth on an annualised basis. That is in line with its 40% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 18% annually. So it's pretty clear that Sineng ElectricLtd is forecast to grow substantially faster than its 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 analyst estimates for Sineng ElectricLtd going out as far as 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Sineng ElectricLtd (1 makes us a bit uncomfortable!) that you should be aware of.

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