Morgan Stanley: Maintains "overweight" rating on SHENZHOU INTL (02313) with target price lowered to HK$77

Morgan Stanley released a research report stating that it has lowered the target price of SHENZHOU INTL (02313) by 14.5%, from 90 Hong Kong dollars to 77 Hong Kong dollars, while maintaining a "buy" rating. Morgan Stanley still believes that SHENZHOU INTL's stock price will rise and provide continued stable structural profit growth. The slight adjustment affects the company's profit forecast for 2024-2026. The bank said that the market has overreacted to issues such as tariffs and growth slowdown in relation to SHENZHOU INTL's scale. However, Morgan Stanley believes that the market is overlooking the company's leading position as an original equipment manufacturer (OEM), which can continue to provide structural profit growth and bring returns to investors. The company's outlook for 2025 remains unchanged, benefiting from the growing brand strength and the recovery of major sports brands. Morgan Stanley believes that the company can continue to grow rapidly as an OEM. Shipments are expected to increase by 15% year-on-year in the second half of 2024.