Citi has adjusted its earnings forecasts for Nexteer (01316), leading to a reduction in the target price from HK$8 to HK$7.2, while retaining a "Buy" rating. Nexteer's management held an update meeting today (26th), projecting another record high in revenue this year, with growth expected to outpace the market by 200 to 300 basis points, primarily driven by the Asia-Pacific region. Profit margins are anticipated to improve further, with Asia-Pacific margins forecast to remain between 16% and 17%. Management expects Electromechanical Braking (EMB) to commence production by the end of this year and secure contracts within the year, while Steer-by-Wire (SBW) operations are projected to contribute significantly to revenue starting in 2026, supported by strong free cash flow. However, due to a more conservative outlook on the passenger vehicle market, Citi has lowered its revenue forecasts for the group for this year and next by 8% to 9%, to $4.9 billion and $5.25 billion respectively. Gross margin forecasts have been reduced by 0.8 to 1.1 percentage points to 11.2% and 11.5%, and net profit forecasts have been cut by 20% to 31%, to $110 million and $142 million.