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2026-10-12 14:17:47 JPM published a research report stating that JOHNSON ELEC H (00179.HK) issued a profit warning for the first half of the fiscal year ended September. Despite broadly stable revenue, net profit is expected to decline 56% to 62% YoY and 16% to 27% HoH to between USD50 million and USD58 million. JPM highlighted three key points: (1) foreign exchange-related impacts accounted for about two-thirds of the YoY earnings decline, while ongoing pricing pressure and cost inflation also weighed on underlying profitability; (2) growth in solid oxide fuel cells (SOFC) has yet to offset weakness in traditional businesses, while delays in launching China automotive projects continued to limit utilization of existing capacity; and (3) although the bank lowered near-term earnings forecasts, rising contributions from new businesses and operational efficiency measures provide identifiable medium-term margin improvement drivers. The bank cut its FY2027-29 net profit forecasts for JOHNSON ELEC H (00179.HK) by 22% to 29%. Based on an average FY2027/28 price-to-earnings ratio of 10x, it lowered the TP from HKD21 to HKD18 and maintained a Neutral rating, balancing persistent earnings pressure and execution risks against the potential improvement in operating leverage once earlier investments are converted into revenue. JPM lowered its FY2027-29 net profit forecasts for JOHNSON ELEC H (00179.HK) by 29%, 22% and 23% to USD169 million, USD247 million and USD309 million, respectively, representing 25%, 8% and 7% below market consensus. The bank forecast gross margin to decline from 23% in FY2026 to 21.5% in FY2027, before improving to 22.5% and 23% in FY2028 and FY2029, respectively, supported by improved utilization, economies of scale from new businesses and expanded manufacturing capacity. (da/u)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese 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. | |