CONANT OPTICAL (02276) experienced an intraday drop of more than 4% during trading. At the time of writing, the stock was down 2.88%, trading at HK$59, with a turnover of HK$36.3797 million. The movement follows a U.S. Supreme Court ruling that declared tariffs imposed under IEEPA by the previous administration to be illegal. The tariffs, which included reciprocal and fentanyl-related duties totaling 20%, were deemed unlawful. Analysis from Guotai Haitong indicates that while this ruling eliminates the specific tariff category, the current administration has since implemented new Section 122 tariffs at a rate of 15%. The brokerage believes the impact of these new tariffs is limited due to statutory caps and an expiration date, which alleviates some of the tariff pressure on companies like CONANT OPTICAL. According to available information, CONANT OPTICAL derived approximately 13% of its 2024 revenue from the U.S. market. The company's previous comprehensive effective tax rate for U.S. business was nearly 40%, which included the now-illegal 20% tariff. Guotai Haitong stated that, based on the court's decision, tariffs previously paid may be eligible for rebates. If these duties are recovered, it could directly enhance net profit for 2026, representing positive news for CONANT OPTICAL, as the rebates may significantly improve its financial performance.
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