JPMorgan Cuts Shenzhou International Target Price To HK$60

JPMorgan said Shenzhou International's revenue is expected to improve gradually in the second half, while earnings should broadly stabilize before a significant recovery in 2027, with gross margin recovery remaining the key variable, according to ETNet. The bank expects second-half order momentum to improve quarter on quarter, supported by continued strength at Adidas and Uniqlo, smaller declines at Nike and Puma, steady positive growth from mainland brands including Anta and Li Ning, contributions from new customer ALO, and a low base effect. It forecasts second-half revenue to rise 2% year on year after a 5% decline in the first half, while profit is seen falling 4% because of continued gross margin pressure. JPMorgan also expects sales and earnings to grow 5% and 14%, respectively, in 2027. It cut its target price on Shenzhou International to HK$60 from HK$70 and kept an Overweight rating, saying the stock's 2027 forecast price-to-earnings ratio of 9 times and interim dividend payout ratio of 61.5% make the risk-reward attractive if orders recover as expected and margins normalize.