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<Research> BOCOM International Lowers TP for SHENZHOU INTL (02313.HK) to HKD74.1 as Last Year's Results Miss Expectations
Recommend 2 Positive 2 Negative 1 |
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BOCOM International published a report stating that SHENZHOU INTERNATIONAL (02313.HK)'s 2025 results were below expectations, with pressure on gross profit margin. In 2025, the company's revenue grew by 8.1% year-on-year to RMB31 billion, with volume increasing by approximately 9% and a slight decrease in unit price. The annual gross profit margin decreased by 1.8 percentage points year-on-year to 26.3%, showing pressure; the decline in gross profit margin was mainly due to rising labor wages, insufficient ramp-up efficiency at the new garment factory in Cambodia, and sharing part of the US market import tariffs for customers in the second half of the year. The final net profit attributable to the parent company decreased by 6.7% year-on-year to RMB5.83 billion, which was below the bank's expectations. The company guided that capacity is expected to achieve mid-single-digit growth in 2026 but noted that there is still uncertainty in gross profit margin. Considering SHENZHOU's guidance, the bank adopted a more conservative revenue assumption, lowering the 2026-2027 revenue forecast by 6-9%. At the same time, it lowered the gross profit margin forecast, expecting the 2026 gross profit margin to remain roughly flat year-on-year. Based on these adjustments, the 2026-2027 earnings forecast was lowered by 15-18%. Based on an unchanged forecast price-to-earnings ratio of 16 times for 2026, the target price was lowered to HKD74.1, equivalent to a forecast P/E ratio of 16 times for this year. The "Buy" rating is maintained. (ha/w) Auto-translated by third-party software This translation was auto-generated by third-party software. 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. More Details
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