CLSA has released a report stating that SHENZHOU INTL (02313) recorded sales of RMB 16.027 billion in the second half of last year, representing a 2% year-on-year increase but falling 4% below market expectations. The gross profit margin was 25.6%, which was 1.8 percentage points lower than market forecasts. The firm has reduced its sales forecast for SHENZHOU for 2026-2027 by 10% to 14% and its net profit forecast by 21% to 22%, reflecting the weaker-than-expected performance last year and pressure on gross margins. Consequently, the target price has been significantly cut from HK$81 to HK$52, although the "Outperform" rating is maintained. CLSA projects that SHENZHOU's sales will grow 4% year-on-year in 2026, with volume growth in the mid-single digits and average selling prices expected to remain flat. The gross margin forecast is down 1.5 percentage points year-on-year to 24.8%, while the net profit forecast declines 3% year-on-year to RMB 5.669 billion.