Jinwu Financial News | According to CMB International Development Research Report, Zhixing Group (01539) is an energy management contract (EMC) service provider for LED lighting products. Since 2022, the company has signed a number of agreements with the regional government of Malaysia to strengthen its position in the local market. The bank expects these agreements to drive Zhixing's rental service revenue to reach a compound annual growth rate of 100% in fiscal year 25-26 (March end). On the financial side, Zhixing has gone through a difficult period after completing debt restructuring. More importantly, the company will introduce capital from Abu Dhabi in 2023, which will not only improve the company's equity structure and balance sheet, but will also open the door to the rapidly growing Middle East market for Zhixing.
The bank expects the company's core earnings per share compound annual growth rate of 1.8 times in fiscal year 25-26, and the breakthrough in the Middle East market will bring a further increase in the bank's current forecast. The first coverage gave a “buy” rating, with a target price of HK$0.64.