22/08/2019 15:18

{I-bank focus}Nomura trims Crystal Int'l (02232) to HK$3.8

[ET Net News Agency, 22 August 2019] Nomura lowered its target price for Crystal
International Group (02232) to HK$3.8 from HK$4.5 and maintained its "neutral" rating.
The research house said Crystal's 1H net profit decline due to weak GPM and one-off
expenses from the capacity reallocation programme. Tight cost control was positive, with
adjusted SG&A ratio down 0.9pp.
Given the company's effort to reduce its exposure to the higher tariff, revenue
contribution from the PRC production base that ships to the US decreased sharply from 14%
in FY2018 to 9% in 1H 2019, and management expects it to reduce further in 2H 2019.
However, the US market remains a key market for Crystal (37.5% of total sales), Nomura
cut its FY2019-20 earnings forecasts by 19% to reflect the weak sales and GPM. (KL)

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