Damo: Lowering Nexteer's (01316) target price to HK$6.1 and lowering the profit forecast for this year and next year by 5-10%

The Zhitong Finance App learned that Damo released a research report saying that Nexteer's (01316) 2026-2027 profit forecast was lowered by 5-10% to reflect that China's automobile production was weaker than expected and that gross margin pressure was greater than expected due to a sharp rise in raw material costs. The target price was lowered from HK$6.3 to HK$6.1, and the rating was “in sync with the market”. The bank expects Nexteer's revenue to grow 7% year over year in 2026. Whether rising costs can be successfully passed on and OEM compensation can be obtained will be a key variable in gross margin in 2026.