HK Stock Market Move | Shenzhen Woer Heat-shrinkable Material (09981) falls more than 6% again in the first quarter due to rising raw material prices, putting slight pressure on the company's gross profit margin.

Shenzhen Woer Heat-shrinkable Material (09981) fell by more than 6%, hitting a low of 16.38 Hong Kong dollars, as of the time of publication, down by 5.54%, at 16.53 Hong Kong dollars, with a turnover of 502.01 million Hong Kong dollars. On the news front, Shenzhen Woer Heat-shrinkable Material released its first-quarter performance, with operating income of approximately 2.032 billion yuan, a year-on-year increase of 15.52%; net profit of 231 million yuan, a year-on-year decrease of 7.63%. Huatai pointed out that the comprehensive gross profit margin in the first quarter was 30.46%, a year-on-year decrease of -2.07 percentage points, mainly due to the increase in raw material prices for high-margin power high-voltage products and wind power business not being passed on to product prices, and it is expected that the rapid growth of high-margin high-speed communication line products in the future will help to increase the overall gross margin. The bank pointed out that it is optimistic about the company's high-speed communication line business benefiting from the growth of AI short-range interconnection demand at home and abroad. The company has a core equipment advantage and is expected to increase market share and expand customer base. Considering the fluctuations in raw material prices in the company's power main business and the impact of the appreciation of the yuan on exchange gains and losses, the bank lowered the gross profit margin of the power business and increased future financial expenses, and therefore revised downward the company's net profit forecast for the years 2026-2028 to 1.831 billion, 2.364 billion, and 2.777 billion yuan, respectively.