Last week, you might have seen that Shenzhen Inovance Technology Co.,Ltd (SZSE:300124) released its quarterly result to the market. The early response was not positive, with shares down 4.2% to CN¥59.18 in the past week. Statutory earnings per share disappointed, coming in -21% short of expectations, at CN¥0.30. Fortunately revenue performance was a lot stronger at CN¥6.5b arriving 11% ahead of predictions. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 consensus forecast from Shenzhen Inovance TechnologyLtd's 27 analysts is for revenues of CN¥37.9b in 2024. This reflects a notable 18% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 13% to CN¥2.03. In the lead-up to this report, the analysts had been modelling revenues of CN¥36.5b and earnings per share (EPS) of CN¥2.32 in 2024. While next year's revenue estimates increased, there was also a substantial drop in EPS expectations, suggesting the consensus has a bit of a mixed view of these results.
There's been no major changes to the price target of CN¥74.29, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. 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. Currently, the most bullish analyst values Shenzhen Inovance TechnologyLtd at CN¥94.00 per share, while the most bearish prices it at CN¥60.00. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shenzhen Inovance TechnologyLtd's past performance and to peers in the same industry. We would highlight that Shenzhen Inovance TechnologyLtd's revenue growth is expected to slow, with the forecast 25% annualised growth rate until the end of 2024 being well below the historical 31% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 17% annually. So it's pretty clear that, while Shenzhen Inovance TechnologyLtd's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
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. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at CN¥74.29, 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 Shenzhen Inovance TechnologyLtd. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Shenzhen Inovance TechnologyLtd analysts - going out to 2026, and you can see them free on our platform here.
We also provide an overview of the Shenzhen Inovance TechnologyLtd Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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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.