Daiwa: Lowering the target price of Sinotruk (03808) to HK$21.7, reaffirming the “outperform the market” rating

The Zhitong Finance App learned that Daiwa released a research report saying that it is expected that Sinotruk (03808) will increase its sales ratio of electric vehicles this year and the decline in exports to Russia will continue to reduce profit margins. The bank adjusted this year's earnings forecast per share to RMB 2.37 and lowered the target price from HK$24 to HK$21.7; reaffirming the “outperforming the market” rating.

The bank raised Sinotruk's revenue forecast for 2025 to 2026 by 9 to 11% to reflect FY2024 results and possible further growth in the Group's heavy truck market share; considering that price competition may ease, it raised its net profit forecast for 2025 to 2027 by 4 to 6%, but it still expects the increase in the proportion of electric vehicles to put some pressure on gross profit. The bank is cautious about the recovery of the domestic heavy truck market, as the macro environment is still severe and freight prices are low.