BOCI Securities: Raises NEXTEER's (01316) target price to HK$5.5, expects mid-term revenue to increase by 7% to 8% year-on-year.

Bank of China International released a research report stating that it is expected that NEXTEER (01316) will see a 7% to 8% year-on-year increase in mid-term revenue, reaching $2.25 billion. This is mainly due to the sharp increase in sales in the Asia-Pacific region, as well as the shortfall in demand in non-Asia-Pacific regions compared to expectations. Net profit is expected to reach $40 million to $50 million during the period. The bank believes that the current valuation of NEXTEER is reasonable and maintains a "hold" rating, with the target price raised from HKD 5.3 to HKD 5.5. The bank mentioned that in May of this year, NEXTEER's second largest shareholder sold 49 million shares at a price higher than HKD 6 per share, and it is expected that they may continue to sell shares at the appropriate time in the future. Fundamentally, the bank believes that NEXTEER can consolidate its leading position in the global steering industry, but due to the early penetration of new technologies and the uncertainty in market demand under tariff pressures, substantial profit release will still take time.