Citi has issued a research report reducing its target price for Dajin Heavy Industry Co.,Ltd. (01081) H-shares by 21%, from HK$43 to HK$34, while maintaining a Buy rating on the stock.
The brokerage cut its net profit forecasts for the company for 2026 to 2028 by 23% to 29%, primarily due to slower-than-expected monopile deliveries, reflecting reduced returns as subsidy prospects remain uncertain and interest rates rise.
Although Dajin Heavy Industry Co.,Ltd. (01081) reported third-quarter results that fell short of expectations and were disappointing, Citi noted that the company's share price has already dropped 65% since its H-share listing in May, which may have priced in most of the risks.
Potential new offshore wind farm projects in Germany and the UK could help the company secure new orders in 2027, which would help rebuild investor confidence on a 12-month basis.
Citi stated that at the current price, Dajin Heavy Industry Co.,Ltd. (01081) trades at 10.3 times its forecast 2027 price-to-earnings ratio and 0.9 times its price-to-book ratio, representing an attractive valuation, and the brokerage expects the company's earnings to recover in 2027 and 2028.
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