Morgan Stanley: Shenzhou International (02313.HK) issues a mid-term profit warning that falls short of expectations, stock price may fluctuate in the short term.

According to the Zhitong Finance APP, Morgan Stanley has released a research report stating that Shenzhou International (02313.HK) predicts that its net profit for the first half of this year will decrease by 38% to 43% year-on-year. This is mainly due to rising raw material and labor costs, with some production capacity still ramping up, along with the increase in oil prices affecting raw material costs; the appreciation of the RMB against the USD; and weak demand leading to declines in both shipment volume and income for the first half of the year. However, considering that investors may have ample expectations regarding its weak performance in the first half of the year, Morgan Stanley believes that any stock price correction will present a good entry opportunity, maintaining an "Overweight" rating with a target price of HKD 50.