CICC: Maintains FERRETTI (09638) as outperforming the industry with a target price of HKD 36.

CICC released a research report stating that it maintains an "outperform" industry rating and a target price of HKD 36 for FERRETTI (09638), corresponding to a 6.3 times EV/EBITDA for 2026. The current stock price trades at 6.3 times EV/EBITDA for 2026, consistent with the target price. CICC's main points are as follows: 1H26 performance below market consensus expectations Ferretti S.p.A. announced its 1H26 results: net revenue decreased by 5.3% year-on-year to 600 million, lower than the Visible Alpha consensus expectation of 610 million, primarily affected by a significant decline in new orders (down 26.9% year-on-year to 340 million), although partially supported by resilient backlog orders (up 0.6% year-on-year to 1.46 billion). Net revenue from new yachts was 590 million, a year-on-year decrease of 5.6%, but showed a trend of improvement quarter-on-quarter (2Q26 down 2.9% year-on-year vs. 1Q26 down 8.0% year-on-year). Adjusted EBITDA was 90 million (down 6.7% year-on-year), with a profit margin of 15.8% (vs. 16.0% in 1H25), below the consensus expectation of 100 million, mainly due to the temporary reduction in fixed cost absorption. Development trend The bank acknowledges that geopolitical uncertainty and macroeconomic headwinds have prolonged customer decision-making cycles, putting pressure on short-term orders. However, the group still maintains a net cash position of 95 million and a more resilient backlog, with approximately 900 million in revenue locked in for 2026 based on confirmed revenue for 1H26 and net backlog orders to be delivered within the year. With its leading position in the luxury yacht industry, the bank believes the company has the resilience to meet current challenges. Earnings forecast and valuation Considering the continued weak demand, delays in customer decision-making, and ongoing macro headwinds, the bank has lowered its 2026 net revenue forecast by 8% to 1.26 billion, its new yacht net revenue forecast by 6% to 1.22 billion, and its adjusted EBITDA forecast for 2026 by 13% to 190 million. The bank introduces its 2027 forecast: net revenue of 1.29 billion, new yacht net revenue of 1.24 billion, and adjusted EBITDA of 210 million. Based on resilient backlog orders and its leading position in the yacht industry, the bank believes the company should be able to withstand recent headwinds. Risk warnings: geopolitical tensions; macroeconomic uncertainty.