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<Research> Citi Cuts SERES (09927.HK) TP to HKD63.7, Rates Neutral on Tepid Sales
Recommend 3 Positive 2 Negative 2 |
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Citi issued a research report noting that, according to the latest data from the China Passenger Car Association, SERES (09927.HK) and Huawei-backed new energy vehicle brand AITO recorded May sales of 30,300 units, down 17% YoY and up 1% MoM. Brand market share decreased by 0.7 ppts YoY to 2.2%. Cumulative sales for the first five months of 1Q26 reached 130,000 units, up 4% YoY. In light of the tepid sales performance, the bank lowered its sales forecasts for SERES for 2026 and 2027 by 15% to 16% to 468,000 and 528,000 units, respectively. Revenue forecasts were also cut by 15% to 17% to RMB152 billion and RMB169 billion, respectively. Due to weakening economies of scale and raw material cost inflation, Citi also reduced its gross margin forecasts for 2026 and 2027 by 2.4 to 3.2 ppts to 26.8% and 25.7%, respectively. Accordingly, net profit forecasts for 2026 and 2027 were slashed by 49% to 52% to RMB5.113 billion and RMB6.556 billion, respectively. Citi expects SERES to continue facing sales pressure amid intense competition from numerous new large SUV models launching this year. Given the relatively wide discount of its H shares, the bank maintained a Neutral rating on its H shares and lowered the TP from HKD98.9 to HKD63.7. (gc/da) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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