CMB International Securities: Lower target price for China Resources Microelectronics' (00881.HK) to HKD 22.3, new car market may see the dawn.

According to the Wisdom Finance APP, CMB International Securities released a research report stating that China Sun Group (00881.HK) recorded a net profit attributable to the parent company of 1.011 billion RMB in the first half of the year, which was approximately 50% below market expectations. This was mainly due to the pressure on the profitability of new cars and used cars. The gross profit margin of new cars decreased significantly, mainly due to the impact of manufacturers' subsidy pace. The management of China Sun Group believes that the new car market is about to usher in a dawn, reaching the bottom and even having the opportunity to reverse, thanks to the continuous integration of distribution channels, the concentration of market share towards leading companies, and strong anti-"internal competition" policies that are favorable for stabilizing car sales prices. In addition, the company's core pillar of solid growth in after-sales service and smooth progress in new energy business, maintaining a "buy" rating, lowering the company's target price from 24 Hong Kong dollars to 22.3 Hong Kong dollars, equivalent to a 12.8 times price-earnings ratio for the 2025 fiscal year, consistent with the company's historical average level.