Nomura released a research report stating that the target price of Shenzhou International (02313) was raised by 3.3% from HK$101 to HK$104.3, while maintaining the “buy” rating. In response to satisfactory inventory removal progress, the company's 2024 order visibility prospects are brighter than before. Sales growth for 2024-2025 will be fine-tuned by 4%-5%, and gross margin forecast will be raised to a higher range of 20%-30% to reflect better capacity utilization.
Nomura pointed out that Shenzhou International's performance in 2023 was mixed. Among them, the capacity utilization rate was encouraging. However, net profit was basically in line with expectations. The gross profit margin for the second half of last year was 25.8%, up 3.4 percentage points from the first half of the year, better than Nomura's expectations. According to management, the capacity utilization rate bottomed out last year, which is expected to be fully produced in the first quarter of this year, which is positive news for the bank.