CICC has issued a research report stating that due to the upward shift in industry valuation center and the company's long-term growth prospects from benefiting from global manufacturing transfer and the development of high-tech industries such as AI, it has raised MORIMATSU INTL's (02155) target price by 50% to HK$12 with an "outperform" rating.

The firm noted that MORIMATSU INTL, a provider of core equipment, process systems and digital factory solutions, reported first-half revenue of RMB 2.687 billion, down 22.7% year-over-year, and net profit attributable to parent company of RMB 340 million, down 10.1% year-over-year. The first-half performance was in line with market expectations.

The firm believes this was mainly due to an order recognition cycle of approximately 9 to 14 months, while new orders signed last year declined 23% and order backlog fell 10%. The suspension of certain local projects in China also affected revenue recognition.

The firm stated that due to the time required for delivery and recognition of certain projects, it has lowered the group's net profit forecast for this year by 27.7% to RMB 740 million, and introduced a net profit forecast of RMB 937 million for next year.