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<Research> Citi Initiates 90-Day Upside Catalyst Watch on WASION HOLDINGS (03393.HK), TP HKD34
Recommend 5 Positive 7 Negative 1 |
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Citi published a report noting that shares of WASION HOLDINGS (03393.HK) fell 11% yesterday (28th). The broker believes this likely reflected market concerns over potential price cuts in State Grids smart meter tenders. However, WASIONs subsidiary WILLFAR INFORMATION (688100.SH) reported 1Q net profit rising 6.4% YoY to RMB139 million, outperforming peers. Citi has decided to terminate its previous positive short-term view and initiate a new 90-day upside catalyst watch. The broker said the catalyst watch is based on three reasons: first, it expects strong earnings growth in distribution business and overseas smart meter sales in 2026-2027; second, WASION has in-house manufacturing capability for meter relays, a key component whose price has surged 2 to 4x in 2026, helping alleviate potential margin pressure in its grid smart meter business; third, current valuation is attractive, corresponding to forecast 2026 price-to-earnings ratio of 16.4x, price-to-book ratio of 3.2x and dividend yield of 2.4%. Citi noted that gross margin of WASIONs grid smart meter business fell 4 to 5 ppts from 40% in 2025 to about 35% to 36% in 1Q. However, it expects recovery in 2H26, as most 2025 order backlog will be delivered in 1H, leading to YoY decline in related revenue in 1H before rebounding in 2H. The broker maintained a Buy rating with a TP of HKD34. (ec/ww) 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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