It's been a good week for Asymchem Laboratories (Tianjin) Co., Ltd. (SZSE:002821) shareholders, because the company has just released its latest first-quarter results, and the shares gained 5.7% to CN¥80.99. Asymchem Laboratories (Tianjin) reported a serious miss, with revenue of CN¥1.4b falling a huge 25% short of analyst estimates. The bright side is that statutory earnings per share of CN¥6.26 were in line with forecasts. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the recent earnings report, the consensus from 16 analysts covering Asymchem Laboratories (Tianjin) is for revenues of CN¥6.45b in 2024. This implies a noticeable 7.5% decline in revenue compared to the last 12 months. Statutory earnings per share are forecast to plunge 38% to CN¥3.33 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥6.56b and earnings per share (EPS) of CN¥3.88 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.
The average price target fell 13% to CN¥99.88, with reduced earnings forecasts clearly tied to a lower valuation estimate. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Asymchem Laboratories (Tianjin), with the most bullish analyst valuing it at CN¥145 and the most bearish at CN¥61.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 9.8% by the end of 2024. This indicates a significant reduction from annual growth of 33% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 15% per year. It's pretty clear that Asymchem Laboratories (Tianjin)'s revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Asymchem Laboratories (Tianjin). Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Asymchem Laboratories (Tianjin)'s revenue is expected to 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 Asymchem Laboratories (Tianjin)'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 Asymchem Laboratories (Tianjin) going out to 2026, and you can see them free on our platform here..
Plus, you should also learn about the 1 warning sign we've spotted with Asymchem Laboratories (Tianjin) .
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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.