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Investing.com - HSBC has upgraded Yonyou Network Technology Co Ltd (SHA:600588) from Hold to Buy, while raising its price target to RMB16.00 from RMB13.40.
The upgrade follows Yonyou’s second-quarter 2025 results, which exceeded expectations and increased HSBC’s confidence in the company’s accelerated revenue growth outlook.
HSBC cited three key factors supporting its more positive view: the company has fully recovered from its organizational restructuring that ended in the first quarter of 2025, reduced industry competition, and artificial intelligence emerging as a new growth driver.
The investment bank has revised its 2025-2027 earnings estimates upward and now expects Yonyou to become profitable in 2026, a year earlier than its previous forecast of 2027.
HSBC also noted a valuation gap, pointing out that Yonyou trades at 4 times its projected 2026 price-to-sales multiple, compared to competitor Kingdee’s 7 times multiple, despite the two companies historically trading at similar valuation levels.
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