CICC: Maintains Zhonglian Heavy Industries (01157) target price of HK$7.58 rating as “outperforming the industry”

The Zhitong Finance App learned that CICC released a research report stating that it maintained the target price of HK$7.58 for H shares of Zhonglian Heavy Industries (01157,301157.SZ) and also maintained a target price of RMB 9.36 for A-shares, both of which maintained a “outperforming industry” rating. CICC maintained its earnings forecast of RMB 0.58 and RMB 0.73 per share for 2025 and 2026 (same below). Furthermore, domestic revenue from construction machinery is expected to grow positively in 2025.

The company's results for the first quarter of this year exceeded CICC's expectations, with revenue of 12.117 billion yuan, up 2.9% year on year, and net profit to mother of 1.41 billion yuan, up 54% year on year. Mainly due to the company's asset disposal proceeds. The increase in overseas revenue led to an improvement in gross margin. The company's gross margin increased 0.2 percentage points year-on-year to 28.7%, mainly due to the increase in the company's overseas share. According to the company's public results conference, the company's overseas revenue increased 15.17% year-on-year in the first quarter, with exports growing at a rate of about 20%. The company's operating cash flow continues to improve. The R&D cost rate increased 0.4 percentage points year over year to 6%.