Goldman Sachs has published a research report reiterating its "Buy" rating on LONKING (03339), while lifting its earnings per share forecasts for 2026 to 2028 by 7% to 16%. The target price has been raised from HK$3.7 to HK$4. This adjustment follows the company's first-half results, which showcased a net profit surge of 22% year-on-year to RMB 773 million, hitting the top end of the profit alert range previously provided.
The reported net profit came in 2% above Goldman Sachs' own estimates, with core earnings exceeding expectations by an even broader margin of 11%. This outperformance was primarily driven by better-than-anticipated gross margin expansion and more effective control over selling, general, and administrative expenses. During the period, revenue grew 19% year-on-year to RMB 6.658 billion, broadly in line with market forecasts.
A detailed breakdown reveals that loader revenue climbed 37% year-on-year, underpinned by a 32% increase in sales volume and a 4% uptick in average selling prices. Management attributed this robust growth to rising electric loader penetration, a higher proportion of exports, and an ongoing product mix upgrade. Gross margin expanded by 1.3 percentage points year-on-year to reach 21.5%, which was 1 percentage point above Goldman Sachs' projection.
Looking ahead, management indicated that sales momentum remained solid through July and August, with continued market share gains. The company targets full-year revenue growth of at least 15% year-on-year, while overseas revenue is projected to surge by more than 30% in the current year.
Comments