Yamato: Minoru Yuugen Group (00551.HK) cuts target price to 16.5 Hong Kong dollars, cautious about order volume in the second half of the year.

Zhitong Finance and Economics APP learned that Daiwa released a research report stating that the mid-term OEM revenue of Yuexuan Group (00551.HK) increased by 6.5% year-on-year, mainly driven by a 2% year-on-year increase in average selling price and a 4.7% year-on-year increase in shipment volume. Although the capacity utilization rate further increased to 95% in the second quarter, the gross profit margin decreased by 0.2 percentage points year-on-year to 17.8% due to uneven production scheduling and rising salaries in various factory areas. The bank reiterated its "buy" rating on Yuexuan and slightly lowered the target price from HK$17 to HK$16.5, cautious on the order volume in the second half of the year, and lowered earnings per share forecast for 2025 to 2027 by 3% to 7% based on adjustments to shipment volume and gross profit margin forecasts.