Key Takeaways:
Citigroup assigned a Buy rating to Han's CNC Technology (03200.HK), setting a price target of HKD160 after the company’s first-quarter net profit surged 177 percent.
The bank’s positive outlook is driven by a 104 percent year-over-year revenue increase and improved cost controls, according to its research report.
Han's CNC reported net profit of RMB323 million for the first quarter of 2026. Gross margin for the period increased 3.5 percentage points year-over-year to 33.1 percent, though this was a decline from the 42.2 percent margin seen in the fourth quarter of 2025 due to a lower mix of AI-related revenue.
The company is positioned to capitalize on growing AI hardware demand, with management expecting AI product revenue to climb to between 50 and 60 percent of the total in 2026. This shift is projected to drive gross margin improvement in the second half of the year.
The expected margin recovery hinges on Chinese PCB manufacturers expanding capacity, which management anticipates will begin between September and October. For investors, the report from Citi signals confidence in the company's ability to capture a significant share of the AI-driven hardware boom. The key catalyst to watch will be the company's second-half performance as new PCB capacity comes online.
This article is for informational purposes only and does not constitute investment advice.
