It's been a good week for Suzhou Dongshan Precision Manufacturing Co., Ltd. (SZSE:002384) shareholders, because the company has just released its latest first-quarter results, and the shares gained 3.7% to CN¥14.73. Results were mixed, with revenues of CN¥7.7b exceeding expectations, even as statutory earnings per share (EPS) fell badly short. Earnings were CN¥0.17 per share, -27% short of analyst expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Suzhou Dongshan Precision Manufacturing after the latest results.
Taking into account the latest results, the most recent consensus for Suzhou Dongshan Precision Manufacturing from nine analysts is for revenues of CN¥37.0b in 2024. If met, it would imply a credible 5.9% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 45% to CN¥1.51. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥38.7b and earnings per share (EPS) of CN¥1.58 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.
It'll come as no surprise then, to learn that the analysts have cut their price target 5.2% to CN¥23.24. 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. The most optimistic Suzhou Dongshan Precision Manufacturing analyst has a price target of CN¥32.50 per share, while the most pessimistic values it at CN¥15.10. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Suzhou Dongshan Precision Manufacturing'shistorical trends, as the 8.0% annualised revenue growth to the end of 2024 is roughly in line with the 8.6% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 17% per year. So it's pretty clear that Suzhou Dongshan Precision Manufacturing is expected to grow slower than similar companies in the same industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Suzhou Dongshan Precision Manufacturing. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Suzhou Dongshan Precision Manufacturing's future valuation.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Suzhou Dongshan Precision Manufacturing going out to 2026, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 2 warning signs for Suzhou Dongshan Precision Manufacturing 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.