Goldman Sachs: Reiterates "Buy" rating on SHENZHOU INTL (02313), with target price reduced to HK$77

Goldman Sachs released a research report stating that it has lowered its target price for SHENZHOU INTL (02313) from HK$90 to HK$77, a decrease of 14.4%, based on a forecasted 2025 price-to-earnings ratio of 16 times to reflect slower profit growth, while reiterating a "buy" rating. While there is uncertainty in the outlook for the main customers' demand and trade tensions, the bank believes that the group has strong manufacturing efficiency and orders should be supported by wallet share growth, with expansion into Indonesia this year expected to help alleviate tariff concerns. The bank noted that considering the recent business development of the group, the profitability of key customers, outlook, and the performance of OEM peers, it has lowered profit forecasts for 2024-26 by 3%, with a decrease in gross margin forecast for 2024 to 28%.