UBS Group expects that the performance in the traditional peak seasons of September and October will be a key indicator for whether Yihai Intl (01579) can achieve its annual target.
According to the Zhitong Finance app, UBS Group released a research report stating that due to concerns about market demand and industry competition, the full-year sales and net profit forecast for Yihai Intl (01579) has been lowered by 1% and 8% respectively, to a year-on-year growth of 11% and remaining flat, expecting that the company's business growth and profit margins will still face certain challenges. However, the downside risk of the stock price is limited, maintaining a 'neutral' rating, with the target price being lowered from HK$14 to HK$11.3.
The report states that the company's management expects a double-digit year-on-year increase in revenue in the second half of this year, with the gross margin remaining flat year-on-year, and raw material costs remain stable. Due to the continuation of the trend from the first half of the year in July to August, the bank expects that the performance in the traditional peak seasons of September and October will be a key indicator for the company's ability to achieve its annual target.