MORIMATSU INTL (02155) shares surged 14.23% in pre-market trading on Friday, following a positive research report from CICC that maintained an outperform rating and significantly raised the target price for the company.

CICC has increased its target price for MORIMATSU INTL by 50% to HK$12.00, citing the upward shift in industry valuation and the company's potential to benefit from global manufacturing transfers and long-term growth opportunities in AI and other high-tech industries. The new target price corresponds to a 14.4x 2026 P/E ratio and represents a 22.0% upside potential from the current stock price.

Despite lowering its 2025 net profit forecast by 27.7% to 740 million yuan due to project delivery and revenue recognition timing, CICC remains optimistic about MORIMATSU INTL's prospects. The firm highlighted the company's improving net profit margin, which rose to 12.6% in the first half of 2025, up 1.8 percentage points year-over-year. Additionally, MORIMATSU INTL reported a significant 89.5% year-over-year increase in new orders for the first half of 2025, totaling 5.996 billion yuan, with the pharmaceutical sector driving much of this growth. The company's orders on hand reached a historic high of 10.566 billion yuan, up 20.4% year-over-year, further supporting CICC's positive outlook.