Citigroup: "Buy" rating for Shenzhen Han's CNC Technology (03200), target price of 160 Hong Kong dollars.

Citibank released a research report stating that Shenzhen Han's CNC Technology (03200) saw a 177% year-on-year increase in net profit to 323 million RMB in the first quarter, benefiting from a 104% year-on-year growth in revenue and improved cost control. The bank gave the H-share a "buy" rating with a target price of 160 Hong Kong dollars. The bank stated that the gross profit margin in the first quarter increased by 3.5 percentage points to 33.1% year-on-year, but fell from 42.2% in the fourth quarter of last year, mainly due to a decrease in AI-related revenue contribution by quarter. Management expects that as more Chinese PCB manufacturers begin expanding production from September to October this year, AI product revenue contribution is expected to reach 50% to 60% by 2026, driving improvements in gross profit margin in the second half of the year. Citibank's preference for AI PCB and Apple device sectors is as follows: Han's Laser Technology Industry Group (002008.SZ), Shenzhen Han's CNC Technology H-shares, and Shenzhen Han's CNC Technology (301200.SZ) A-shares. The bank gave Shenzhen Han's CNC Technology A-shares a "neutral" rating with a target price of 186 RMB.