Everbright Securities Maintains "Buy" on SHENZHOU INTL Despite Earnings Miss, Citing Low Valuation

Stock News
Apr 02

Everbright Securities Company Limited issued a report stating that SHENZHOU INTL (02313) faces performance pressure in 2025 due to influences from the external macro environment and currency exchange rates. Regarding capacity construction, the company is progressing systematically. By the end of 2025, the second fabric factory in Vietnam had completed the main civil works and partial equipment installation. Once operational, it is expected to alleviate fabric supply constraints following the expansion of overseas garment factories. A newly built garment factory in Cambodia plans to employ 6,000 workers and has already recruited approximately 5,400. Its production efficiency has reached about 85% of normal levels, with the new factory's ramp-up and efficiency gains anticipated to positively impact the gross margin. Additionally, technological upgrades at the company's domestic production bases continue to advance. Considering ongoing uncertainties in the domestic and international macroeconomic and retail environments, Everbright Securities has lowered its profit forecasts for the company for 2026-2027, reducing net profit attributable to owners by 16% and 14% respectively compared to previous forecasts, and has added a profit forecast for 2028. The firm now expects net profit attributable to owners for 2026-2028 to be 6.0, 6.78, and 7.4 billion yuan, respectively. Corresponding EPS for 2026-2028 are forecast at 3.99, 4.51, and 4.92 yuan, with P/E ratios of 11, 9, and 9 times. Due to the low valuation, Everbright Securities maintains a "Buy" rating on SHENZHOU INTL.

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