Bank of China International: Downgraded SHENZHOU INTL (02313) target price to HKD 40 due to low earnings visibility.

BOC International released a research report stating that it has lowered the target price for SHENZHOU INTL (02313) from HKD 48 to HKD 40. The firm indicated that it is still too early to determine whether SHENZHOU INTL can achieve a significant recovery in the second half of 2026, maintaining a "Hold" rating. Although investors may have anticipated that SHENZHOU INTL's net profit in the first half of 2026 will decline by 40% year-on-year, in line with the profit warning issued by the company on August 7, the firm believes that investors may become more cautious after actual performance and future outlook are announced. Aside from currency fluctuations, the firm believes the market is primarily focused on two aspects: first, the demand from core clients, especially Nike and Puma; second, SHENZHOU's ability to cope with multiple cost pressures. The firm expects that in the second half of 2026, there may be some quarter-on-quarter improvement in exchange rates and order situations, but earnings visibility remains low, while the risks of rising costs and tariffs may persist into 2027.