[ET Net News Agency, 11 July 2019] Citi Research lowered its target price for Johnson
Electric (00179) to HK$21.8 from HK$23.2 and maintained its "buy" rating.
The research house cut its earnings estimates by 17-18% in FY2020-22 due to weaker-than-
expected 1Q FY2020 revenue number for sluggish consumer confidence effects on auto sales
across all core markets.
Management blamed the revenue setback on rising tariff barriers and geopolitical
uncertainty, which have hit consumer confidence in particular for big-ticket items like
automobiles, home appliances, and office equipment.
But Citi said Johnson Electric has a minimal effect on the current sanction list of
US$200bn under the US-China trade war which may impact 5% of total revenue. Nonetheless,
the sales decline will inevitably cause operating de-leverage, so the sensitivity is that
EBITDA may be reduced by 3% for every revenue down by 1% due to heavy fixed cost. (KL)
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Super Quote | Detail Quote | Interactive Chart | Transaction | Related News | Related Securities | Company Information | Dividend Records | Short Sell
00179 JOHNSON ELEC H
Nominal 
10.940 +0.440 (+4.190%) Others
11/07/2019 15:37
[I-bank focus]Citi trims Johnson Electric (00179) to HK$21.8
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