The analysts covering Henan Mingtai Al.Industrial Co.,Ltd. (SHSE:601677) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
Following the downgrade, the latest consensus from Henan Mingtai Al.IndustrialLtd's three analysts is for revenues of CN¥33b in 2024, which would reflect a sizeable 20% improvement in sales compared to the last 12 months. Per-share earnings are expected to ascend 10% to CN¥1.20. Before this latest update, the analysts had been forecasting revenues of CN¥35b and earnings per share (EPS) of CN¥1.70 in 2024. The forecasts seem less optimistic after the new consensus numbers, with lower sales estimates and making a large cut to earnings per share forecasts.
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. We can infer from the latest estimates that forecasts expect a continuation of Henan Mingtai Al.IndustrialLtd'shistorical trends, as the 20% annualised revenue growth to the end of 2024 is roughly in line with the 17% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 11% annually. So it's pretty clear that Henan Mingtai Al.IndustrialLtd is forecast to grow substantially faster than its industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Henan Mingtai Al.IndustrialLtd. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Henan Mingtai Al.IndustrialLtd, and we wouldn't blame shareholders for feeling a little more cautious themselves.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Henan Mingtai Al.IndustrialLtd analysts - going out to 2026, and you can see them free on our platform here.
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