JP Morgan raises ZHEJIANGEXPRESS (00576) target price to 7.5 Hong Kong dollars, maintains "neutral" rating.

JP Morgan released a research report stating that it has raised ZHEJIANGEXPRESS's (00576) target price from HK$7.2 to HK$7.5, maintaining a "neutral" rating. The report believes that in order to trigger a valuation reassessment, there needs to be a more clear recovery in traffic flow, or progress in national toll road policies. However, it is unlikely that either of these will be achieved before 2027. The bank has updated its model for ZHEJIANGEXPRESS to include performance in the first quarters of 2025 and 2026. It is estimated that the company's revenue in 2026 and 2027 will be 20.2 billion and 20.8 billion RMB respectively, with an expected net profit after tax of 5.7 billion and 5.8 billion RMB, representing a year-on-year growth of 6% and 2% respectively. The current stock price corresponds to a forecasted 2026 fiscal year price-earnings ratio of 7.2 times, a dividend yield of 6.2%, and a commitment from management that after the A-share listing, the minimum dividend per share will be 41 RMB for support.