Citi cut China Liansu (02128)'s earnings estimates for this year and next by 14% to 19%.
The Zhitong Finance App learned that Citibank released a research report saying that since profits are expected to recover this year and maintain China Liansu (02128)'s “buy” rating, the earnings forecast for this year and next two will be lowered by 14% to 19%, and the target price will be lowered from HK$9 to HK$7.5. The company's performance fell short of expectations, and gross profit is expected to be low due to weak industry demand, and sales growth will also slow.
The bank expects that China Liansu's revenue growth will resume high single-digit positive growth, mainly due to continued growth in plastic pipe sales and good supply chain development in China and overseas markets. Assuming that the Group no longer has any impairment losses related to real estate, its profit is expected to increase 23% year over year, which will grow faster than revenue growth. The bank expects the Group's earnings per share to grow at a compound annual rate of 22% from 2023 to 26.