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Analysts Downgrade Forecasts for Hainan Drinda New Energy Technology Co., Ltd. (SZSE:002865)

by Krystal

Today, shareholders of Hainan Drinda New Energy Technology Co., Ltd. (SZSE:002865) experienced a setback as market forces led analysts to downgrade their forecasts for the company’s performance this year. Both revenue and earnings per share (EPS) estimates underwent significant cuts as analysts adjusted their outlook for the business, indicating that previous projections were overly optimistic.

In light of the recent downgrade, the company’s three analysts now anticipate revenues of CN¥19 billion for 2024, approximately aligning with the figures from the last 12 months. Statutory earnings per share are expected to increase by 23% to CN¥4.43. Prior to this adjustment, analysts had projected revenues of CN¥31 billion and EPS of CN¥13.55 for 2024. This shift reflects a notable decline in analyst sentiment, marked by substantial reductions in revenue and EPS estimates.

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An alternative perspective on these forecasts considers their alignment with historical performance and industry benchmarks. Notably, Hainan Drinda New Energy Technology’s anticipated revenue growth is expected to decelerate significantly, with a projected annualized growth rate of 0.2% until the conclusion of 2024, substantially lower than the historical 72% annual growth observed over the past five years. Comparatively, industry peers (with analyst forecasts) collectively anticipate revenue growth of 24% annually. Taking into account this projected slowdown in growth, it becomes evident that Hainan Drinda New Energy Technology is expected to trail behind other players in the industry.

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The Bottom Line

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The key concern highlighted by the revised estimates is the downward adjustment of earnings per share forecasts, indicating potential challenges ahead for Hainan Drinda New Energy Technology. Furthermore, the downgraded revenue estimates suggest that the company’s sales growth may lag behind the broader market. Following such a significant revision, investors may interpret analysts’ outlook as considerably bearish towards Hainan Drinda New Energy Technology, possibly leading some to opt out of investing in the stock.

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Analysts’ skepticism towards Hainan Drinda New Energy Technology may stem from various factors, including concerns regarding earnings quality. For further insights, interested parties can access additional information by clicking here to explore this and other identified concerns.

Another avenue for identifying companies at potential inflection points is by monitoring insider trading activity. Investors can track whether management is buying or selling through our complimentary list of growing companies where insiders are making purchases.

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