Bank of America Securities: Raises Sinotruk Jinan Truck (03808) target price to 29 Hong Kong dollars, reiterates "neutral" rating.

Bank of America Securities released a research report stating that it has raised the target price of Sinotruk Jinan Truck (03808) from HK$24.3 to HK$29, while maintaining a neutral rating, believing that the current stock price reflects its growth prospects. However, the bank still favors the company's long-term business story of expanding exports and its solid local market position. The bank held a conference call with Sinotruk Jinan Truck. Management stated that the company's full-year sales target of 300,000 vehicles is progressing smoothly. The company is steadily advancing towards its sales and profit margin targets for 2025, and plans to maintain a cautious capital expenditure plan between 2025-2027, not exceeding 2 billion RMB per year, with a focus on investing in overseas production bases such as Kazakhstan, Brazil, and Indonesia. It is also expected that the dividend payout ratio for 2025-2027 will not be less than 55%. Based on updated sales and gross margin assumptions, Bank of America Securities has raised Sinotruk Jinan Truck's revenue forecasts for 2025-2027 by 5%, 4%, and 4%, respectively. Due to the increase in overseas sales contribution, the gross margin forecasts for 2026 and 2027 have been raised by 0.5 percentage points each. Earnings per share forecasts for 2025-2027 have also been raised by 4%, 10%, and 10% respectively.