HK Stock Market Move | SHENZHOU INTL(02313) falls more than 4% again, institutions downgrade company's sales growth forecast for the second half of the year, production output expected to continue to increase next year.

SHENZHOU INTL (02313) fell by more than 4%, down 4.12% to HK$64.05 as of the time of writing, with a turnover of HK$4.99 billion. Citigroup released a research report stating that it has reduced its profit forecast for SHENZHOU INTL for 2025 to 2027 by 2%, lowering its target price from HK$95 to HK$94. It maintains a "buy" rating and believes that the stock price decline may reflect management's conservative sales outlook, providing a buying opportunity, as the expected dividend yield for the 2026 financial year is 4.8%, and the average compound annual earnings growth rate for the next 3 years is 12%. The bank has revised downward its sales growth forecast for the second half of this year from high single digits to mid single digits for SHENZHOU INTL, mainly due to nearly flat sales growth in the third quarter as the two major brands still need to negotiate tariff sharing with the group. The bank has observed accelerated delivery volumes in October and November, catching up with the progress lagging behind in the third quarter. However, Guosheng believes that in the past, industry demand and customer orders have fluctuated, but SHENZHOU INTL has always adhered to long-term asset construction and steadily expanded its production capacity. The bank believes that in 2026, with the recovery of core customer orders, the company is expected to enter a stage of capacity-driven growth, factory utilization saturation, and profit quality optimization brought by the optimization of order structure. By the end of 2024, the company's staff had increased by 12% year-on-year to 103,000; by the end of the first half of 2025, it had reached 110,000, an increase of 9% year-on-year. The bank believes that the capacity improvement and production release brought by the recruitment of garment factory workers in recent years will continue to be reflected in 2026.