Jefferies cut Changfei Optical Cable's (06869) revenue and net profit forecast for 2024-2026 by 17%-26%.
The Zhitong Finance App learned that Jefferies released a research report saying that it raised the target price of Changfei Optical Fiber Cable (06869) by 13.4%, from HK$9.46 to HK$10.73. The company's 2024-2025 earnings forecast per share was lower than the market, and the rating was raised from “hold” to “buy.” The bank lowered the company's 2024-2026 revenue and net profit forecast by 17%-26%, which is 6%-19% lower than market expectations, but its valuation is still attractive and optimistic about the telecom industry ecosystem.
The bank pointed out that Changfei Optical Fiber Cable's revenue for the fourth quarter of 2023 fell 7%, which was less than expected by Furui and the market, but net profit exceeded expectations. Benefiting from the sale of all shares held by Yunhui Optoelectronics, it received a one-time investment income of 440 million yuan. If this revenue is not taken into account, Changfei's net loss in the fourth quarter will reach 61 million yuan. Mainland telecom companies' capital expenditure guidelines have been unfavorable to Changfei for a long time. Bidding volume has declined, but the average unit selling price (ASP) is likely to maintain a healthy level. As the company's diversification strategy is also beginning to bear fruit, it actively invests in surrounding businesses to find new growth drivers.