Sinotruk hit new high since Apr 2021, CICC, Morgan Stanley raise profit forecast, target price
COMPANY NEWS MARKET STOCKS VIEWS & ANALYSIS
Sinotruk hit new high since Apr 2021, CICC, Morgan Stanley raise profit forecast, target price
COMPANY NEWS MARKET STOCKS VIEWS & ANALYSIS

Sinotruk hit new high since Apr 2021, CICC, Morgan Stanley raise profit forecast, target price

 

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Shares of China National Heavy Duty Truck Group, or Sinotruk, surged as much as 7.8% to hit a high of HK$18.16 in Hong Kong, the highest since April 2021, before slipping into negative territory, down 0.8% as of 11:46 am..

The company said that its first-half net profit is expected to jump 80% – 100% year-on-year to reach 2.309 – 2.565 billion yuan. CICC said in a note that the heavy truck industry in mainland China is expected to enter a new growth cycle from 2023 to 2025, which will drive Sinotruk to increase its market share. 

As the release of the company’s economies of scale and strong exports are expected to boost its profitability, the bank raised its profit forecast for this year and next year by 35.2% and 14.3%, respectively, It hiked the company’s target price by 39.1% to HK$22.26 and maintained Outperform rating.

In addition, Morgan Stanley said in a report that Sinotruk’s first-half results were higher than the market and the bank’s expectations, which was mainly driven by strong operating leverage, favorable product portfolio and foreign exchange gains, it said. The bank raised its net profit forecast of Sinotruk’s this year by 8%, and raised its target price from HK$18 to HK$20, maintaining an Overweight rating.