Xiaomo: Remo Minshi Group (00425) is affected by Mexico's new tariffs and is limited to an “increase” rating

The Zhitong Finance App learned that J.P. Morgan Chase released a research report saying that Minshi Group (00425)'s stock price fell by about 6% yesterday (11th). It is believed to be due to market concerns that the Mexican Senate will approve the imposition of new tariffs on various types of imported Chinese goods such as auto parts and steel. The tax rate is as high as 50%, and the new regulations will take effect in 2026. The bank gave an “increase in holdings” rating, with a target price of HK$70.

Xiaomo expects that the new tariffs will have limited impact on Minshi. Since its Mexican business has been in operation for more than 15 years, it has achieved localized material procurement to meet the rules of the US-Mexico-Canada agreement. Management also expects limited cost pressure under localized production, which can mitigate the risk of tariff increases. The bank also pointed out that the potential imposition of a 5% tariff on Mexican imports is also less likely. Since it is sensitive that all Mexican production complies with the US-Mexico-Canada agreement, the Group has more than 50 production bases in North America, the European Union and 15 Asian countries, and has more than 16 years of overseas factory management experience, which is actually in an advantageous position for de-globalization.