Lao Feng Xiang Co., Ltd. (SHSE:600612) came out with its first-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Lao Feng Xiang reported CN¥26b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of CN¥1.53 beat expectations, being 3.6% higher than what the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from Lao Feng Xiang's eleven analysts is for revenues of CN¥81.6b in 2024. This reflects a notable 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 11% to CN¥4.90. Before this earnings report, the analysts had been forecasting revenues of CN¥80.4b and earnings per share (EPS) of CN¥4.86 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of CN¥75.57, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Lao Feng Xiang analyst has a price target of CN¥98.32 per share, while the most pessimistic values it at CN¥48.00. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Lao Feng Xiang's growth to accelerate, with the forecast 17% annualised growth to the end of 2024 ranking favourably alongside historical growth of 9.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. Lao Feng Xiang is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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. We have estimates - from multiple Lao Feng Xiang analysts - going out to 2025, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, 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.