It’s been a good week for Chung-Hsin Electric and Machinery Manufacturing Corp. (TWSE:1513) shareholders, because the company has just released its latest yearly results, and the shares gained 5.0% to NT$170. Revenues of NT$22b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at NT$3.25, missing estimates by 4.3%. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Chung-Hsin Electric and Machinery Manufacturing

TWSE:1513 Earnings and Revenue Growth March 17th 2024

Taking into account the latest results, the current consensus from Chung-Hsin Electric and Machinery Manufacturing’s four analysts is for revenues of NT$25.5b in 2024. This would reflect a solid 15% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 164% to NT$8.48. In the lead-up to this report, the analysts had been modelling revenues of NT$25.3b and earnings per share (EPS) of NT$8.37 in 2024. So it’s pretty clear that, although the analysts have updated their estimates, there’s been no major change in expectations for the business following the latest results.

With the analysts reconfirming their revenue and earnings forecasts, it’s surprising to see that the price target rose 7.5% to NT$204. It looks as though they previously had some doubts over whether the business would live up to their expectations. The consensus price target is just an average of individual analyst targets, so – it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Chung-Hsin Electric and Machinery Manufacturing, with the most bullish analyst valuing it at NT$213 and the most bearish at NT$200 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It’s clear from the latest estimates that Chung-Hsin Electric and Machinery Manufacturing’s rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 13% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 17% per year. Chung-Hsin Electric and Machinery Manufacturing is expected to grow at about the same rate as its industry, so it’s not clear that we can draw any conclusions from its growth relative to competitors.

The most important thing to take away is that there’s been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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 estimates – from multiple Chung-Hsin Electric and Machinery Manufacturing analysts – going out to 2025, and you can see them free on our platform here.

Don’t forget that there may still be risks. For instance, we’ve identified 5 warning signs for Chung-Hsin Electric and Machinery Manufacturing that you should be aware of.

Valuation is complex, but we’re helping make it simple.

Find out whether Chung-Hsin Electric and Machinery Manufacturing is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.



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