[ET Net News Agency, 1 December 2020] Jefferies Research lifted its target price for
Shenzhou International (02313) to HK$155 from HK$145 and reiterated its "buy" rating.
The research house cited its channel checks indicating that Summer 2021 orders are
stronger than Jefferies'previous expectation. It thus believes Shenzhou's 1Q 2021 capacity
is fully loaded (even before considering Uniqlo's third-generation masks).
Jefferies said Shenzhou's share price has been under pressure partly due to market's
concerns regarding RMB appreciation against USD, especially during 3Q. Although this may
have near-term impacts, it highlighted that Shenzhou will gradually adjust its ASP to
compensate for its FX-losses in 3Q.
Jefferies trimmed its 2020 earnings to reflect weaker ASP (in RMB-terms) and margins,
driven by FX. It also increased its forecasts for 2021 to reflect stronger than expected
orders for 2021 summer assortment. (KL)