Bank of America Securities Raises WUXI LEAD Target Price to HK$64 on Margin Improvement Outlook

Stock News05-05

Bank of America Securities issued a research report stating that WUXI LEAD (00470) reported first-quarter revenue of RMB 3.7 billion, representing a 19% year-on-year increase but an 8% sequential decline. The figure was 15% below the bank's expectations, attributed to slower-than-expected revenue recognition from battery equipment sales. The gross margin stood at 33.6%, declining by 0.9 and 1.3 percentage points year-on-year and quarter-on-quarter, respectively, and falling short of the bank's forecast of 35.5%. This was due to the recognition of some low-margin solar equipment orders during the period. Net profit reached RMB 405 million, up 11% year-on-year and 7% sequentially, but 14% below the bank's projections. The company anticipates that gross margins will improve quarter-on-quarter in the coming quarters as higher-margin battery equipment orders are recognized. Considering the first-quarter performance, the bank lowered its profit forecasts for 2026 and 2027 by 2% and 1%, respectively. However, it raised the target price from HK$57 to HK$64 and reaffirmed its "Buy" rating.

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