Yamato: The target price of Shengkanglong Chemical (03759) reached HK$38.5 and raised the profit test to maintain a “buy” rating

The Zhitong Finance App learned that Yamato released a research report stating that it raised the target price of Kanglong Chemical (03759) from HK$25.5 to HK$38.5, maintained a “buy” rating, and raised Kanglong Chemical's earnings forecast per share for this year and next two years by 6.6% and 2.6%, respectively. The interim results were broadly in line with the previous profit forecast, with annual revenue growth of 17.9% to RMB 7.6 billion, in line with the profit forecast, reaching the Group's original guideline limit of 12% to 18% growth; adjusted non-IFRS net profit increased 20.3% year over year, which was also at the upper limit of the profit forecast, exceeding the bank's and market expectations.

Based on the strong performance in the first half of the year and the growth in new orders, management raised the revenue growth guide for the full year of this year from 12% to 18% to between 15% and 20%, stressing that customer demand and orders continued to be strong in July and August. It is expected that future profit growth will be slightly faster than revenue growth.