[ET Net News Agency, 8 November 2017] Daiwa Research raised its target price for
Shenzhou International Group (02313) to HK$83 from HK$70, and maintained its "buy" rating.
The research house said Shenzhou's share price has already rallied by 45% year-to-date
and the stock is trading at its all-time high, but Daiwa believes the combination of its
likely strong 2017 financial results, high earnings visibility and solid management
execution will allow the stock to continue to re-rate upwards in the near term.
Daiwa believes much of the order book momentum for 1H will be carried into 2H, primarily
driven by its 3 major sportswear customers. It looks for a mid-teens growth in volume YoY
in 2H, plus another low single-digit improvement in its ASP on an improving product mix.
Daiwa raised its 2017-19 EPS estimates by 3-8% after trimming its operating expense
assumptions and the blended effective tax rate. (KL)