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M Stanley Downgrades CHINASOFT INT'L (00354.HK) to Underweight, Slashes TP to HKD2.6
M Stanley issued a research report downgrading CHINASOFT INT'L (00354.HK) from Equalweight to Underweight, and sharply cutting its TP from HKD6.6 to HKD2.6.M Stanley noted that CHI...
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M Stanley Downgrades CHINASOFT INT'L (00354.HK) to Underweight, Slashes TP to HKD2.6
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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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