HAITONG INT'L: Cuts YOFC (06869) target price by 39.2% to HK$144, maintains "Outperform" rating, raises earnings forecasts

HAITONG INT'L released a research report stating that it has cut the target price for YOFC (06869) by 39.2% from HK$237 to HK$144, maintaining an "Outperform" rating. The bank raised its net profit forecasts for the company for 2026 to 2028 by 32%, 40%, and 30% respectively to RMB9.1 billion, RMB13.1 billion, and RMB11.2 billion, believing that the earnings peak will still occur before new capacity is commissioned, and expects earnings to peak in 2027. YOFC's third-quarter revenue rose 139.4% year-on-year to RMB9.316 billion, 10.6% above market expectations; net profit was RMB3.2 billion, broadly in line with expectations. Gross margin fell 3.2 percentage points quarter-on-quarter to 57.4%, 4.6 percentage points below market expectations. HAITONG INT'L pointed out that the upward revision to earnings forecasts mainly reflects a higher sales volume base based on the company's actual performance in the first nine months. The bank still expects earnings to peak in 2027, after which net profit may decline 14% in 2028 as spot prices fall and new capacity is gradually commissioned starting in the second half of 2027.