Citigroup: downgrades ZOOMLION (01157) to "Neutral" with target price lowered to 3.8 Hong Kong dollars.

Citigroup released a research report stating that the rating of ZOOMLION (01157) has been downgraded from "buy" to "neutral", with the target price reduced from 6.5 Hong Kong dollars to 3.8 Hong Kong dollars, corresponding to 0.5 times the forecasted market-to-book ratio of 2024 (previously 0.9 times). It pointed out that the continuous weakness in Chinese real estate investment, coupled with the recent strict guidelines for infrastructure project approval, has increased concerns about the outlook for construction machinery demand, especially for cranes and concrete machinery, which are highly relevant to the real estate market, and demand may remain weak for a prolonged period in the future. The bank also mentioned that the macroeconomic environment is severe, ZOOMLION's accounts receivables are higher than those of its peers, which may indicate higher credit impairment losses, leading to a downward revision of profit forecast by 6% and 12% for the company in the next two years.