Zhejiang Meida Industrial Co., Ltd. (SZSE:002677) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. The analysts look to have been far too optimistic in the lead-up to these results, with revenues of (CN¥195m) coming in 29% below what they had expected. Statutory earnings per share of CN¥0.02 fell 83% short. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Zhejiang Meida Industrial's six analysts is for revenues of CN¥1.54b in 2025. This would reflect a sizeable 45% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 102% to CN¥0.65. In the lead-up to this report, the analysts had been modelling revenues of CN¥1.56b and earnings per share (EPS) of CN¥0.67 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at CN¥9.05, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Zhejiang Meida Industrial, with the most bullish analyst valuing it at CN¥12.18 and the most bearish at CN¥4.60 per share. 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.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that Zhejiang Meida Industrial's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 35% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 2.8% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.2% annually. So it looks like Zhejiang Meida Industrial is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Zhejiang Meida Industrial. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than 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 forecasts for Zhejiang Meida Industrial 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 Zhejiang Meida Industrial .
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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.
