HK Stock Market Move | JOHNSON ELEC H (00179) falls by over 5% as details of new business plans disclosed are extremely limited. Institutions claim the company's stock price has been overestimated.

Johnson Electric Holdings (00179) fell more than 5%, closing at a 5.53% drop at 29.36 Hong Kong dollars, with a transaction value of 488.762 million Hong Kong dollars. JP Morgan released a research report stating that Johnson Electric Holdings' mid-term performance at the end of September met expectations. The company provided very limited details on its new business plans during the financial report briefing, continuing its consistent communication style. Without more disclosure on the progress of orders for AIDC and Siasun Robot & Automation, it is expected that the market sentiment towards the stock will remain subdued, and any specific updates on these business channels could trigger significant valuation reassessment. Citi pointed out that the company's management expects moderate revenue growth in the second half of the 2026 financial year until the end of March next year, with both the Automotive Products (APG) and Industrial Products (IPG) divisions likely to see growth. However, the bank believes that the growth momentum may not be seen until the 2027 financial year, and the two new businesses (AI liquid cooling pump and humanoid robot joints) are expected to account for only 3% of total sales in the 2027 financial year, which is insufficient to support a significant revaluation this year. Citi mentioned that the company's stock price has more than doubled this year because of the two new businesses, with management emphasizing long-term growth potential. However, the bank believes that the company's stock price has been excessively overvalued, far ahead of its fundamentals.