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<Research> HSBC Research Lowers TP for SHENZHOU INTERNATIONAL (02313.HK) to HKD78, Expects Delayed Profit Margin Recovery
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HSBC Global Research reported that SHENZHOU INTERNATIONAL (02313.HK) underperformed expectations in the second half of 2025, primarily due to weakened revenue and profit margins. During this period, the gross profit margin fell by 1.5 ppts to 25.6% compared to the first half, mainly due to insufficient domestic capacity utilization and the depreciation of the USD in the fourth quarter. Revenue grew by only 2.2% during the same period, reflecting weak domestic sales, Puma's inventory reduction, and continued decline in Flyknit sales. The firm has postponed its profit margin recovery expectations to 2027, as short-term adverse factors outweigh the improvements in capacity utilization. These factors include input cost pressures, order visibility risks, tariff impacts, and pricing pressures. As a result, the firm has lowered its 2026 gross profit margin forecast from 28.5% to 27% and its revenue growth forecast from 7.7% to 5.8%, leading to a 7.7% reduction in the 2026 net profit forecast and a 3.9% reduction in the 2027 net profit forecast. The target price has been reduced from HKD86.6 to HKD78, while maintaining a "Buy" rating. (ss/u) Auto-translated by third-party software This translation was auto-generated by third-party software. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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