Morgan Stanley has issued a report maintaining its "Overweight" rating on MINTH GROUP (00425) while increasing the target price from HK$43 to HK$50. However, the bank lowered its profit forecasts for 2025, 2026, and 2027 by 7%, 12%, and 18%, respectively, reflecting potential margin pressure due to rising costs. At the same time, Morgan Stanley raised its medium-term growth projection from 7% to 9%, based on stronger-than-expected revenue contributions from the humanoid robot, liquid cooling, and electric vertical take-off and landing aircraft businesses. MINTH's stock has climbed 35% year-to-date, significantly outperforming the Hang Seng Index's approximate 4% gain, indicating growing market optimism around order wins in its humanoid robot and liquid cooling segments. The report noted that MINTH holds an advantage over other domestic Chinese suppliers through its global production footprint, with existing facilities in the U.S., Canada, and Mexico. Earlier this month, the company announced plans to establish a joint venture with leader harmonious drive in the U.S. to expand humanoid robot joint module assembly in the North American market. Morgan Stanley believes that amid global geopolitical uncertainties, MINTH is well-positioned to secure orders from U.S. customers. The bank also expects the battery enclosure business to continue supporting growth this year and next. Additionally, the report highlighted market anticipation that founder Ronghua Qin may return at the shareholders’ meeting in May, potentially resuming the role of CEO or chairman, which could serve as a significant potential catalyst.
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