[ET Net News Agency, 7 August 2019] Morgan Stanley lowered its target price for Crystal
International (02232) to HK$4 from HK$5.05 and downgraded its rating to "equal-weight"
from "overweight".
The research house likes Crystal's leading position in Asia for garment manufacturing.
However, given Morgan's top-down theme on favoring sportswear OEMs (Crystal only has 9%
sportswear exposure in 2019) and the fact that Crystal is still in capacity migration that
may experience certain transitional pain (lowered top-line strength on capacity
constraints and negative impact on margins due to migration costs), Morgan thinks it will
take time for Crystal's share price to perform, albeit the already low expectations from
investors and low valuation multiple.
Crystal now trades at 7.4x 2H 2019-1H 2020 EPS, versus 7x-23x since IPO in November
2017. (KL)