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Revenue Beat: Xinyi Energy Holdings Limited Beat Analyst Estimates By 6.8%

Simply Wall St
·3-min read

The annual results for Xinyi Energy Holdings Limited (HKG:3868) were released last week, making it a good time to revisit its performance. It was a pretty mixed result, with revenues beating expectations to hit HK$1.6b. Statutory earnings fell 4.8% short of analyst forecasts, reaching HK$0.15 per share. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.

Check out our latest analysis for Xinyi Energy Holdings

SEHK:3868 Past and Future Earnings, March 19th 2020
SEHK:3868 Past and Future Earnings, March 19th 2020

Taking into account the latest results, the most recent consensus for Xinyi Energy Holdings from six analysts is for revenues of HK$1.79b in 2020, which is a solid 12% increase on its sales over the past 12 months. Statutory earnings per share are expected to expand 11% to HK$0.17. In the lead-up to this report, analysts had been modelling revenues of HK$1.75b and earnings per share (EPS) of HK$0.15 in 2020. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at HK$2.49, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. Currently, the most bullish analyst values Xinyi Energy Holdings at HK$2.80 per share, while the most bearish prices it at HK$2.12. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.

Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. Next year brings more of the same, according to analysts, with revenue forecast to grow 12%, in line with its 14% annual growth over the past three years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 3.2% next year. So it's pretty clear that Xinyi Energy Holdings is forecast to grow substantially faster than its market.

The Bottom Line

The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Xinyi Energy Holdings following these results. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Xinyi Energy Holdings going out to 2022, and you can see them free on our platform here.

You can also view our analysis of Xinyi Energy Holdings's balance sheet, and whether we think Xinyi Energy Holdings is carrying too much debt, for free on our platform here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.