Goldman Sachs: Raises target price for LONKING (03339) to HKD 4, maintaining a "Buy" rating.

Goldman Sachs released a research report stating that it maintains a "Buy" rating on LONKING (03339) and has raised its earnings per share forecast for 2026 to 2028 by 7% to 16%, adjusting the target price from HKD 3.7 to HKD 4. LONKING's net profit for the first half of the year increased by 22% year-on-year to RMB 773 million, reaching the upper end of the earlier profit alert range and exceeding the bank's expectations by 2%. The core profit also surpassed expectations by 11%, mainly benefiting from an expansion in gross profit margin and better-than-expected control of sales, general, and administrative expenses. During the period, operating revenue grew by 19% year-on-year to RMB 6.658 billion, generally in line with expectations. Revenue from loaders increased by 37% year-on-year, primarily driven by a 32% growth in sales volume and a 4% increase in average price, which management attributed to the higher penetration of electric loaders, an increase in export proportion, and product mix upgrades. The gross profit margin expanded by 1.3 percentage points year-on-year to 21.5%, exceeding Goldman Sachs' expectation by 1 percentage point. Management stated that sales momentum remained robust in July and August, with market share continuing to grow, and they expect a year-on-year revenue growth of at least 15% for the whole year, with overseas revenue targets exceeding 30% growth.