Citigroup: Downgrading Weidai (00303.HK) target price to 62 Hong Kong dollars, rating "Buy"

According to the Wise Wealth Financial APP, Citibank issued a research report stating that Weidai (00303.HK) saw its net profit drop by 5.9% to 1.568 billion US dollars in the fiscal year ending in March, which is about 13% lower than the bank's previous forecast of 1.796 billion US dollars. The main reasons for the underperformance are (1) inventory backlog in the United States before Independence Day, pushing up manufacturing costs and direct labor costs; (2) the acquisition of Gigaset leading to an increase in operating expenses and tax rate. Based on this, the bank has lowered its profit forecast for the fiscal years 2026 to 2027 by 23% to 24%, and introduced a forecast for the fiscal year 2028. Referencing historical averages and a dividend yield of 7% to 8% for fiscal year 2026, the bank has revised its target price from 65 Hong Kong dollars to 62 Hong Kong dollars, with a rating of "buy".