Daiwa: 2038.HK raised its price target to HK$1.50 to "outperform the market"

Daiwa issued a report that it expects 2038.HK to have a solid profit recovery from the second half of this year, and is expected to turn a loss into a profit, mainly due to orders from Google, strong demand in India, and solid orders from Xiaomi (1810.HK). The bank believes that Fuzhikang plans to list its Indian subsidiary to help unlock value. On the other hand, the group's current valuation is equivalent to 0.6 times the price-to-book ratio next year, and the risk-reward is attractive. Daiwa upgraded the rating of Fuzhikang shares from "holding" to "outperforming the market" and raised its target price from HK$1.15 to HK$1.5. Earnings forecasts for next year and 2023 were revised down 10% to 18% to reflect more prudent revenue assumptions.

This article originated from Grand Gateway