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<Research> Citi Cuts Nexteer (01316.HK) Earnings Forecast for This and Next Year by 20% to 31%, Lowers TP to HKD7.2
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Citi published a research report stating that it held an update meeting today (26th) with the management of Nexteer (01316.HK). The management expects to achieve a new revenue high this year, with a growth rate 200 to 300 basis points higher than the market, mainly driven by the Asia-Pacific region. Profit margins are expected to further improve, with the Asia-Pacific region's profit margin expected to remain between 16% and 17%. The management anticipates that the Electromechanical Braking (EMB) will commence production by the end of this year and secure contracts within the year, while the Steer-by-Wire (SBw) business is expected to contribute significant revenue starting in 2026, with strong free cash flow. However, considering a more conservative view on the passenger car market, Citi has revised down the group's revenue forecast for this and next year by 8% to 9%, to USD4.9 billion and USD5.25 billion, respectively. The gross margin forecast has been lowered by 0.8 to 1.1 percentage points, to 11.2% and 11.5%. The net profit forecast has been reduced by 20% to 31%, to USD110 million and USD142 million. Based on the earnings forecast adjustments, the firm has lowered the target price from HKD8 to HKD7.2, maintaining a "Buy" rating. (hc/da) AASTOCKS Financial News Website: www.aastocks.com Auto-translated by third-party software This translation was auto-generated by third-party software. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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