Shareholders might have noticed that Shandong Xiantan Co., Ltd. (SZSE:002746) filed its first-quarter result this time last week. The early response was not positive, with shares down 3.5% to CN¥5.86 in the past week. Revenues were CN¥1.1b, 21% shy of what the analysts were expecting, although statutory earnings of CN¥0.26 per share were roughly in line with what was forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the three analysts covering Shandong Xiantan are now predicting revenues of CN¥7.00b in 2024. If met, this would reflect a huge 24% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 376% to CN¥0.78. In the lead-up to this report, the analysts had been modelling revenues of CN¥6.81b and earnings per share (EPS) of CN¥1.04 in 2024. So it's pretty clear the analysts have mixed opinions on Shandong Xiantan after the latest results; even though they upped their revenue numbers, it came at the cost of a large cut to per-share earnings expectations.
The analysts also upgraded Shandong Xiantan's price target 21% to CN¥11.70, implying that the higher revenue expected to generate enough value to offset the forecast decline in earnings.
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. It's clear from the latest estimates that Shandong Xiantan's rate of growth is expected to accelerate meaningfully, with the forecast 33% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 15% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Shandong Xiantan to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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 Shandong Xiantan going out to 2026, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 3 warning signs for Shandong Xiantan you should be aware of, and 1 of them is a bit unpleasant.
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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.