HK Stock Market Move | CHERVON (02285) fell more than 5% in late trading, still up nearly 30% over the past five sessions; HSBC said the joining of Techtronic's former president is positive.

CHERVON (02285) fell more than 5% in late trading, still up nearly 30% over the past five sessions. As of press time, it was down 5.26% at HK$25.6, with turnover of HK$118 million. On the news front, former TECHTRONIC IND chief executive Joseph Galli Jr joined CHERVON as its new chief executive on September 10, while founder Pan Longquan will remain as chairman. HSBC believes that during Galli's tenure at Techtronic from 2008 to 2024, Techtronic's revenue and net profit recorded compound annual growth rates of 9.5% and 27.7% respectively, and believes his experience can bring a positive impact to Chervon. HSBC pointed out that it raised Chervon's target price-to-earnings ratio from 11x to 14.3x, a 42% discount to Techtronic's 24.6x P/E, and applied it to its 2027 earnings per share forecast of 29 US cents, arriving at a new target price of HK$32.5. The bank expects medium-term growth to accelerate under the new chief executive, with the next catalyst being Galli outlining his future growth and transformation plans to investors.