Citigroup has released a research report following an investor meeting with the management of CHINA LESSO (02128). The group's 2025 performance fell short of expectations, and with the recent surge in oil prices, the bank has adopted a more cautious stance on its gross margin outlook. Consequently, Citigroup has lowered its profit forecasts for 2026 and 2027 by 30% and reduced the target price from HK$7.00 to HK$6.20, while maintaining a "Buy" rating. However, the bank expressed a preference for companies offering higher yields or possessing stronger profit growth prospects within China's infrastructure sector, such as Zoomlion (01157) over Hangcha Group (603298.SH) and China State Construction International (03311). The report noted that despite the recent oil price spike driven by conflict between the US and Iran, CHINA LESSO's management anticipates that gross margin in the first quarter of 2026 will remain consistent with the second half of 2025, supported by raw material restocking. Demand momentum had already been recovering in the three months preceding the conflict (from October last year to January this year), with the overseas channel business expected to be the primary growth driver.