GO
| HSI1 | 22,671.86 | -405.05 | 342.10B |
| HSCEI1 | 7,460.84 | -147.54 | 100.47B |
| Back Zoom + Zoom - Block Traded | |
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2026-06-26 17:04:44 Morgan Stanley issued a research report stating that order volatility at SHENZHOU INTL (02313.HK) in 1H26 will affect its revenue and margins. However, the stock has underperformed the market since the beginning of this year (down 32% versus a 10% decline in the HSI), which has fully reflected the above weaknesses. The broker expects profit to resume growth in 2H26, potentially driving a re-rating of the shares. The broker noted that 1H26 performance was mainly dragged down by weak demand in the China market in 1Q26. Shipment volume in 1H26 is expected to edge down 2% YoY. With the RMB appreciating YoY, the average selling price denominated in RMB is expected to remain flat, leading to a projected 2% YoY decline in revenue for 1H26. The broker added that Adidas and Uniqlo will continue to drive revenue growth, while orders from ANTA SPORTS (02020.HK) and LI NING (02331.HK) have rebounded. Meanwhile, Nike and Puma remain weak. Due to reduced production scale, production volatility at the beginning of the quarter and partial tariff sharing, gross margin for 1H26 is forecast to narrow to 25.6%, down 1.5 ppts YoY. Together with lower contribution from non-operating income, net profit in 1H26 is expected to decline 27% YoY, while operating profit will fall 11% YoY. Nevertheless, the broker expects that as the impact of the Middle East conflict fades and customer sentiment improves, coupled with a low base effect, shipment volume and revenue in 2H26 will grow 9% YoY, with net profit increasing 19% YoY. However, in light of macro uncertainties, the broker trimmed its earnings forecasts for 2026 to 2028 by 3%, 5% and 8%, respectively, and lowered its target price-to-earnings multiple from 14x to 12x. As a result, the TP was cut from HKD58 to HKD50, with the Overweight rating reiterated. The broker believes the stock currently offers an expected dividend yield of over 6%, which appears attractive. AASTOCKS Financial News Website: www.aastocks.com 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. | |