JP Morgan: Lower SHENZHOU INTL (02313) target price to HK$81, expects recovery by 2026, maintains "overweight" rating.
HSBC expects that the sales and profits of Shenzhou in 2026 will increase by 6% and 4% respectively; the net profit margin is 18.3%, a decrease of 0.5 percentage points compared to the same period last year.
J.P. Morgan released a research report stating that due to weak demand, they have reduced their profit forecasts for SHENZHOU INTL (02313) for the years 2026 and 2027 by 20% and 17% respectively. They have also lowered their target price from 94 Hong Kong dollars to 81 Hong Kong dollars, equivalent to a forecasted 2026 12-month P/E ratio of 16 times, while maintaining a "hold" rating. Shenzhou's revenue and profit increased by 8% and decreased by 7% respectively compared to the previous year, which was 3% and 11% lower than market expectations. The underperformance was mainly attributed to sales growth of only 2% in the second half of the year, mainly due to weak domestic market demand (sales dropped by 14% in the second half of the year). J.P. Morgan predicts that Shenzhou's sales and profits in 2026 will increase by 6% and 4% respectively; net profit margin is expected to be 18.3%, a decrease of 0.5 percentage points compared to the same period last year.
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