Beijing Huafeng stock rating upgraded by UBS on growth outlook

Published 18/06/2025, 18:24
Beijing Huafeng stock rating upgraded by UBS on growth outlook

UBS upgraded Beijing Huafeng Test & Control Tech (688200:CH) from Neutral to Buy on Monday, raising its price target to RMB165.00 from RMB105.00. The upgrade follows a recent pullback in the stock price, with UBS citing a projected 26% earnings compound annual growth rate from 2026 to 2028 that it believes is not reflected in the current valuation of 28 times 2026 estimated price-to-earnings.

The firm expressed increased optimism about demand for Huafeng’s existing products, particularly its traditional analog integrated circuit testers (STS8200/STS8300), driven by accelerating localization and improving end-market conditions. UBS also noted faster-than-expected ramp-up of the company’s new high-end system-on-a-chip tester, the STS8600.

Based on these factors, UBS raised its 2026-2028 earnings per share estimates by 20-28%, projecting higher revenue and improved profitability. The new estimates stand 9% and 6% above Wind consensus forecasts for 2026 and 2027, respectively.

Huafeng is currently trading around one standard deviation below its historical average, despite delivering a 24% earnings compound annual growth rate from 2016 to 2024. UBS noted that while the stock trades in line with analog integrated circuit fabless companies, it deserves a higher valuation given its breakthrough in high-end system-on-a-chip testing technology.

UBS identified potential catalysts for the stock, including better-than-expected second-quarter results or stronger shipments of the STS8600 tester. The firm’s new price target represents significant upside from current trading levels.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.