Key Takeaways
Bank of America Securities trimmed its price target for Black Sesame Technologies (02533.HK) to HKD20, citing concerns that rising costs will continue to delay the company’s path to profitability.
The bank’s research report reiterated a Neutral rating on the ADAS chip designer but lowered the target from HKD24.7. The revision follows Black Sesame’s latest annual report, which showed strong top-line growth but continued losses.
Black Sesame's revenue grew 73% year-over-year, exceeding BofA's forecast by 7%, while its adjusted net loss narrowed by 18% to RMB1.08 billion. In response, the bank raised its revenue forecasts for 2026 and 2027 by 8% to 10% but cut adjusted net profit forecasts for the same period by 46% to 89% to account for higher research and development spending.
“While the company has strong revenue growth momentum driven by new product launches, visibility on achieving breakeven in the short term remains low,” the report said.
The price target cut suggests that even with significant top-line expansion, investors may remain cautious until a clearer path to breaking even emerges. The focus for the company now shifts to managing its R&D expenditures without stifling the growth that has impressed analysts.
This article is for informational purposes only and does not constitute investment advice.
