Sichuan Swellfun Co.,Ltd (SHSE:600779) investors will be delighted, with the company turning in some strong numbers with its latest results. Results were good overall, with revenues beating analyst predictions by 2.7% to hit CN¥959m. Statutory earnings per share (EPS) came in at CN¥0.39, some 6.1% above whatthe analysts had 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
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Following the latest results, Sichuan SwellfunLtd's twelve analysts are now forecasting revenues of CN¥5.46b in 2025. This would be a modest 4.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 5.4% to CN¥2.93. Before this earnings report, the analysts had been forecasting revenues of CN¥5.54b and earnings per share (EPS) of CN¥3.04 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in 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¥49.53, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Sichuan SwellfunLtd analyst has a price target of CN¥62.16 per share, while the most pessimistic values it at CN¥31.27. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sichuan SwellfunLtd's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Sichuan SwellfunLtd's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 5.6% growth on an annualised basis. This is compared to a historical growth rate of 10% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.8% per year. Factoring in the forecast slowdown in growth, it seems obvious that Sichuan SwellfunLtd is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sichuan SwellfunLtd. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Sichuan SwellfunLtd going out to 2027, and you can see them free on our platform here.
You still need to take note of risks, for example - Sichuan SwellfunLtd has 2 warning signs (and 1 which is concerning) we think you should know about.
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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.
