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<Research> UBS Cuts Shenzhou International (02313.HK) TP to HKD50, Rating Neutral
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UBS issued a research report stating that Shenzhou International (02313.HK) reported a 20% YoY decline in net profit in 2H last year, significantly below the banks and the markets expectations of 22% and 23% respectively, mainly due to foreign exchange losses and reduced government subsidies. In terms of core operations, operating profit in 2H fell 5% YoY, lower than the banks and markets expectations of 10% and 14% respectively. Sales in 2H rose 2% YoY, with sales volume increasing by a mid-single-digit percentage YoY, while the average selling price declined 0.8% to 0.9% YoY. The bank noted that management expects production capacity to grow by 5% in 2026 and believes the outlook for casualwear orders is better than that for sportswear. It also expects new customer orders in 2H this year. UBS lowered its earnings forecasts for Shenzhou International for 2026 to 2028 by 9% to 12% to reflect a slower recovery in gross margin. The TP was reduced from HKD69 to HKD50, with the rating maintained at Neutral. Given a dividend yield of 5%, the bank expects the share price to trade within a range, with limited downside risk. (ca/da) This article was automatically translated by AI, the Chinese version should be considered the authoritative version. 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. Auto-translated by AI AASTOCKS Financial News |
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