Huatai Research raised its target price for Shenzhou International (02313) to HK$143 from HK$104 and maintained its "buy" rating.
The research house believes Shenzhou has strengthened its market leadership position during the COVID-19 pandemic, thanks to its vertically-integrated capacity located domestically and overseas, rapid response to changing customer demands, concern for its staff, and social responsibility.
As a result, it achieved resilient revenue growth (up 2.3% excluding the discontinued retail business) and GPM (flattish) in 1H. Shenzhou's order growth has recovered in 3Q and visibility has improved.
Meanwhile, advanced hiring ensures its capacity expansion will be sufficient to meet customer demand in the future. Huatai estimated Shenzhou's net profit growth will rebound to 6.5% in 2H.