UBS published a research report indicating that Minshi Group's gross margin recovered strongly to 28.4% in the second half of last year, up 1.8 and 2.1 percentage points year-on-year and half-year respectively. The market is expected to be due to improved economies of scale brought about by revenue growth; continuous improvement in global operating capacity of the plastics business under accelerated production of new products; the North American plant successfully reversed losses last year; and improvements in production efficiency and production yield due to technological upgrades. The bank slightly reduced its sensitive target price from HK$20.8 to HK$20, maintaining a “buy” rating.
According to the report, the inflow of new business orders for sensitive businesses reached a record high last year. Last year, the Group increased its market share in Volkswagen and increased Volkswagen's battery case production business in Europe and China. Minshi seized opportunities in the North American market last year and obtained orders for Nissan and Stellantis battery packs. Furthermore, Sensitive has increased cooperation with BYD, and its innovative products have made a breakthrough in the BYD supply chain and obtained the first battery case order from BYD. The bank's new orders and customer expansion are expected to support Minshi's net profit increase by 19% this year and next.