Dahua Jixian: Lowering the target price of Hongteng Precision (06088) by 54.3% to HK$4.2 to maintain the “buy” rating

The Zhitong Finance App learned that Dahua Jixian released a research report stating that the target price of Hongteng Precision (06088) was lowered by 54.3% from HK$9.19 to HK$4.2 to maintain the “buy” rating. Hongteng Precision's revenue for the third quarter of 2026 increased 4.0% year on year to US$1,378 million, but operating profit fell 38.8% year on year to US$58 million due to rising raw material costs and a slower than expected increase in production capacity. Revenue and net profit for the first three quarters of 2026 reached 69% and 32% of the full-year forecast, respectively.

Management lowered the revenue forecast for the consumer interconnection business, which is expected to drop by about 25% year on year, and lowered the 2026 operating profit guide from the 70% year-on-year increase previously expected to remain basically flat, mainly due to continued pressure on profit margins and slow increase in production capacity. The company aims for the 2027 operating profit growth rate to exceed the revenue growth rate. Specific performance guidelines will be announced in March 2027.