Key Takeaways
Citigroup initiated a 90-day upside catalyst watch for Wasion Holdings (03393.HK) after an 11 percent share price decline, maintaining its Buy rating and HKD 34 target price.
The bank’s action counters market concerns over potential price cuts in State Grid smart meter tenders, which it believes caused the stock’s drop on April 28. The broker said its positive view is based on strong earnings growth prospects, in-house manufacturing capabilities, and an attractive valuation.
Citi noted that while gross margins for Wasion’s grid smart meter business fell from 40 percent in 2025 to around 35 percent in the first quarter, it expects a recovery in the second half of 2026. The call comes as Wasion’s subsidiary, Willfar Information, reported a 6.4 percent year-over-year increase in first-quarter net profit to RMB 139 million, outperforming peers.
Citi's outlook for strong overseas sales was reinforced by Wasion’s announcement in April of a new contract win in Pakistan valued at over RMB 115 million (approximately HK$131.74 million). The bank also highlighted Wasion's in-house manufacturing of meter relays, a key component whose price has surged two to four times in 2026, as a factor that could alleviate margin pressure.
The report suggests the recent stock decline presents a buying opportunity, given the company's growth drivers. Investors will watch for margin improvements in second-half results and further announcements on overseas expansion.
This article is for informational purposes only and does not constitute investment advice.
