[ET Net News Agency, 2 September 2020] Nomura raised its target price for Minth Group
(00425) to HK$34.5 from HK$23 and upgraded its rating to "buy" from "neutral".
The research house expects a good recovery in 2H and Minth now provided a clearer
road-map for its EV/ADAS initiative during the management call. Despite the global
pandemic, gross margins for the EU business over 1H recovered by 5.1pp to 22.8% HoH,
driven by dilution of upfront/start-up costs for Minth's new Serbia plant.
Nomura expects margins to expand further over 2H on gradual new product
commercialization and OEM production. But it cut its 2020/21 net profit forecasts by
33%/21% based on 18%/16% and a 4pp/2.8pp cut in revenue and gross margins to factor in
COVID-19's impact on 1H results. (KL)