Lates News

Daewoo released a research report stating that Yuanyuan Group's first-quarter OEM production business revenue increased by 5.9% year-on-year, but due to uneven production levels and delays in the commissioning of new factories, labor efficiency decreased and the gross profit margin contracted by 2.6 percentage points year-on-year to 17.7%. Management believes that the impact of tariffs on the group's production capacity in Vietnam and Indonesia is controllable. With the possibility of easing trade tensions and the group's undervaluation, the bank reaffirmed a "buy" rating with a target price reduced from HK$19 to HK$17. The report cited Yuanyuan Group's management forecasting that the gross profit margin will continue to be under pressure in the next two to three quarters and may normalize in the fourth quarter due to order recovery. Therefore, Daewoo lowered the group's earnings forecast for the current and next two years by 9% to reflect the downward revision in gross profit margin forecast.