CLSA cut its price target on SANY INT'L to HKD12 from HKD16 after 1Q net profit fell 19.8% and solar losses widened.
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CLSA cuts Sany Int'l target to HKD12 as solar losses mount
CLSA cut its price target on SANY INT'L (00631.HK) to HKD12 from HKD16 after first-quarter profit missed expectations. The broker maintained an Outperform rating.
The company's solar business recorded a loss of RMB120 million in the first quarter, with sales plunging 74 percent from a year earlier, CLSA said in a research report. Management expects the full-year solar loss to exceed RMB400 million, driven by initial investments in microgrid staffing and overseas project expansion that were above market expectations.
SANY INT'L reported first-quarter net profit of RMB509 million, down 19.8 percent year on year. Although overseas revenue doubled, profit margins and cost control fell short of expectations, the broker said. CLSA cut its net profit forecasts for 2026 and 2027 by 28 percent and 19 percent, respectively, to reflect the margin pressure.
The stock fell 4.2 percent on Tuesday, with short selling accounting for 12.2 percent of turnover at HKD12.2 million.
Robust demand for mining equipment and the electrification trend continue to support market share gains, CLSA said. However, losses from emerging businesses will take time to resolve. The target price cut reflects near-term margin headwinds from the solar segment. Investors will watch for updates on the solar division's path to profitability in the coming quarters.
This article is for informational purposes only and does not constitute investment advice.
