Xiaomo: Include Chuangke Industrial (00669) as a positive catalyst to maintain an “gain” rating

The Zhitong Finance App learned that J.P. Morgan Chase released a research report saying that it added Chuangke Industrial (00669) to the positive catalyst watch list, believing that the market is still in the early stages of re-evaluating its data center business. The catalysts are gradually accumulating. The key date is August 31. The bank believes that the market has only just begun to price the structural growth and profit margin increase of Chuangke Industrial's AIDC business, maintaining an “increase in holdings” rating, with a target price of HK$179.

The bank expects the first half of 2026 results and management statements to be key points for the market to re-examine the structural growth and profit margins of its business, and believes that the AIDC business can be transformed into quantifiable segmented KPIs in the future. The market is worried about the high base and rising operating costs, but Xiaomo believes that since the second half of last year, Chuangke Industrial's combination of phased product price increases and continued shift to a high-profit segment is manageable. It predicts sales and profits for the first half of the year to be 8.1 billion and 700 million US dollars respectively, up 4% and 10% year on year, similar to market expectations (5% and 11%); Milwaukee's sales are expected to increase 7.5% year on year, and Ryobi recorded a low unit increase.