It's been a good week for ShanDongDenghai Seeds Co.,Ltd (SZSE:002041) shareholders, because the company has just released its latest full-year results, and the shares gained 5.6% to CN¥9.68. Revenues of CN¥1.6b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at CN¥0.29, missing estimates by 9.9%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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 current consensus from ShanDongDenghai SeedsLtd's nine analysts is for revenues of CN¥1.63b in 2024. This would reflect a reasonable 5.0% increase on its revenue over the past 12 months. Per-share earnings are expected to step up 17% to CN¥0.34. In the lead-up to this report, the analysts had been modelling revenues of CN¥1.85b and earnings per share (EPS) of CN¥0.42 in 2024. Indeed, we can see that the analysts are a lot more bearish about ShanDongDenghai SeedsLtd's prospects following the latest results, administering a real cut to revenue estimates and slashing their EPS estimates to boot.
The consensus price target fell 17% to CN¥13.11, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values ShanDongDenghai SeedsLtd at CN¥18.00 per share, while the most bearish prices it at CN¥10.54. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that ShanDongDenghai SeedsLtd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.0% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 13% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than ShanDongDenghai SeedsLtd.
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. 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 fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of ShanDongDenghai SeedsLtd'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 ShanDongDenghai SeedsLtd going out to 2026, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for ShanDongDenghai SeedsLtd that you should be aware of.
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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.