On August 31, SHENZHOU INTL fell 3.07% in regular trading to HK$35.48, with turnover of HK$150 million, extending its post-earnings decline as the market continued to digest weak first-half results and a wave of brokerage target price cuts.

The company reported H1 net profit of RMB 1.905 billion, down approximately 40% year-over-year, while revenue fell 5.3% to RMB 14.179 billion. Gross margin contracted sharply by 4.5 percentage points to 22.6%, pressured by rising raw material and labor costs, significant RMB appreciation against the USD, and cautious ordering from key brand clients. The interim dividend was cut 36.2% to HK$0.88 per share.

Multiple brokerages subsequently lowered their price targets. BOCI cut its target to HK$40 citing low earnings visibility and maintained a Hold rating, while Nomura trimmed its target to HK$63.80 and CICC maintained an Outperform rating with a HK$52.76 target. Analysts flagged uncertainty around demand from core clients Nike and Puma, along with persistent cost headwinds and tariff risks potentially extending into next year.

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