Bank of America Securities: Raised Wuxi Lead Intelligent Equipment (00470) target price to HKD 64, company indicated improvement in gross profit margin.

Bank of America Securities released a research report stating that Wuxi Lead Intelligent Equipment's (00470) first quarter revenue increased by 19% year-on-year to 3.7 billion yuan, but decreased by 8% quarter-on-quarter, which was 15% lower than the bank's expectations due to the slower recognition of battery equipment revenue than expected. The gross profit margin was 33.6%, down by 0.9 and 1.3 percentage points year-on-year and quarter-on-quarter, lower than the bank's forecast of 35.5%, due to the recognition of some low-profit CECEP Solar Energy equipment orders during the period. Net profit was 405 million yuan, with a year-on-year and quarter-on-quarter growth of 11% and 7%, but was 14% lower than the bank's expectations. The company expects the gross profit margin to improve quarter by quarter in the coming quarters with the confirmation of high-profit battery equipment orders. Taking into account the first quarter performance, the bank lowered its profit forecast for 2026 and 2027 by 2% and 1% respectively. However, the target price was raised from 57 Hong Kong dollars to 64 Hong Kong dollars, while reiterating a "buy" rating.