Hangzhou Electronic Soul Network Technology (SHSE:603258) has released its full year 2023 financial results, showing a decline in revenue and net income compared to the previous year. Revenue decreased by 14% to CN¥677.1m, while net income saw a significant drop of 72% to CN¥56.8m, with a profit margin of 8.4% (down from 25% in FY 2022). The earnings per share (EPS) also decreased to CN¥0.23 from CN¥0.83 in FY 2022.
Looking at the trailing 12 month (TTM) period ending March 31st, 2024, Hangzhou Electronic Soul Network Technology’s revenues and earnings fell short of analyst expectations. Revenue missed estimates by 21%, while EPS missed by 82%. Despite this, the company forecasts a 22% annual revenue growth over the next two years, outperforming the expected 17% growth of the Entertainment industry in China.
However, investors should be cautious about investing in Hangzhou Electronic Soul Network Technology as there are three warning signs that they should consider before making any investment decisions. These warning signs include concerns over valuation, risks associated with insider transactions, and financial health issues that could impact the company’s future performance.
Valuation of the company is complex but investors can access comprehensive analysis to determine if Hangzhou Electronic Soul Network Technology is over or undervalued. This analysis includes fair value estimates, risks, dividends, insider transactions and financial health indicators such as debt-to-equity ratio and return on assets (ROA). It is important for investors to carefully review this information before making any investment decisions.
It is important to note that Simply Wall St provides unbiased analysis based on historical data and analyst forecasts only for educational purposes and does not constitute financial advice or a recommendation to buy or sell any stock. Investors should consider their own objectives and financial situation before making investment decisions.
In conclusion, while Hangzhou Electronic Soul Network Technology has forecasted positive revenue growth for the next two years, investors should be aware of potential risks associated with insider transactions and financial health issues that could impact future performance. It is recommended that investors thoroughly research these factors before investing in this company.
