Nomura hopes that the Jidai Electric (03898) rail transit business has good room for growth.
The Zhitong Finance App learned that Nomura released a research report stating that it gave Times Electric (03898) a “buy” rating, hoping that its rail transit business would have good room for growth, and raised the target price from HK$29 to HK$35. The revenue of the emerging equipment business increased 13% year-on-year to 1,769 billion yuan, accounting for 45% of total sales. Among them, the power semiconductor device business increased by more than 22%.
According to the report, the company performed well in the first quarter, with revenue reaching 3.9 billion yuan, up 27% year on year, while net profit increased 30% to 568 million yuan, 13% and 14% higher than market expectations, respectively. This was mainly due to a 44% increase in rail transit equipment sales and a drop in the operating expenses ratio to 23%, but this was partly offset by a drop in gross margin of 24% during the period.