Deutsche Bank has released a research report stating that it predicts MINTH GROUP (00425) will see its overall gross profit margin for the first half of the year increase by 0.2 percentage points year-on-year to 28.5%. This is expected to drive the company's interim net profit to a new half-year high, rising by 12% year-on-year to 1.43 billion yuan.
Accordingly, the bank has raised its full-year net profit forecast for this year by 0.2%, slightly increasing the target price from HK$41.8 to HK$42.3, while maintaining a "Buy" rating.
The European new energy vehicle market showed strong performance in the first half of the year. New car registrations in Europe increased by more than 6% year-on-year during the period, with pure electric vehicle registrations surging by 35% year-on-year. Considering that the majority of MINTH GROUP's customers are European automakers, Deutsche Bank anticipates that its aluminum battery housing business is highly correlated with the European electrification trend.
As sales of new energy vehicles in Europe grow, the bank estimates that MINTH GROUP's battery housing business revenue could increase by 33% year-on-year in the first half, driving overall revenue growth of 9% year-on-year. Despite rising raw material prices such as aluminum, Deutsche Bank believes that historical performance shows MINTH GROUP has the ability to manage the impact of raw material price fluctuations.
During the period of rising aluminum prices from 2020 to 2022, the gross profit margin of its aluminum materials business still increased from 32.6% to 34%. Management also expects that the recent rise in aluminum prices will have a limited impact on the overall gross profit margin in 2026.
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