M Stanley issued a research report downgrading CHINASOFT INT'L (00354.HK) -0.060 (-1.852%) Short selling $4.10M; Ratio 4.923% from Equalweight to Underweight, and sharply cutting its TP from HKD6.6 to HKD2.6.M Stanley noted that CHINASOFT INT'L's IT outsourcing revenue is under pressure as major clients face margin compression due to AI programming. Although management guided that AI-related revenue will grow by more than 70% in 2026, non-AI businesses (mainly IT outsourcing) are still expected to account for more than 80% of total revenue in 2025. The broker expects both revenue and gross margin to face potential declines in 2026.The broker lowered its revenue forecasts for 2026 to 2028 by 16.7%, 17.3% and 13.3%, respectively, to reflect the potential disruptive risks posed by AI to traditional outsourcing businesses. Over the same period, adjusted EBIT forecasts were cut by 54%, 40.7% and 14%, respectively. As a result, normalized net profit forecasts for 2026 to 2028 were reduced by 70.5%, 52% and 26.3%, respectively. (ad/da)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-15 16:25.)
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