Changes in Hong Kong stocks | Huahong Hongli (01347) fell more than 7%, Bank of America indicates that the company's valuation is too high, Goldman Sachs indicates that revenue guidance for the third quarter falls short of expectations

The Zhitong Finance App learned that Huahong Hongli (01347) fell by more than 7%. As of press release, it fell 7.6% to HK$1,191, with a turnover of HK$2,107 billion.

Bank of America Securities released a research report saying that considering that Huahong Hongli is under increasing pressure on depreciation costs, it is expected that the company's profit margin and profitability will not improve significantly next year. The bank's valuation base for Huahong was extended until 2027, and the target price was raised from HK$63 to HK$69. Considering that the valuation was too high, it reaffirmed the “underperforming market” rating.

Goldman Sachs said that Huahong Hongli's revenue for the third quarter is expected to increase by 7% to 9% on a quarterly basis, with gross margin between 16% and 18%. Compared with 16.5% in the second quarter, this shows that gross margin is still improving as production capacity continues to expand. The median revenue guide was 11% and 6% lower than the bank's and market expectations, respectively, and the performance fell short of expectations; however, the gross margin guidance was 16% to 18%, higher than the bank's forecast of 15.3% and the market's 16.5% forecast.