Morgan Stanley has issued a research report, revising its profit forecasts for NEXTEER (01316) downward by 5-10% for the 2026-2027 period. This adjustment reflects weaker-than-anticipated automotive production in China and greater-than-expected pressure on gross margins due to a significant rise in raw material costs. The firm has consequently lowered its price target from HK$6.3 to HK$6.1, maintaining an "Equal-Weight" rating.
The report anticipates that NEXTEER will achieve a 7% year-on-year revenue growth in 2026. The key variables for the company's gross margin in that year are identified as its ability to successfully pass on the increased costs to customers and secure compensation from original equipment manufacturers (OEMs).
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