Index falls as earnings results weigh; pound above $1.33, Bodycote soars
On Thursday, Jefferies analyst Kelly Zou adjusted the price target for Sunwoda Electronic Co Ltd (300207:CH) shares, reducing it to RMB 30.00 from the previous RMB 32.00, while reaffirming the firm’s Buy rating on the stock. The revision follows the company’s financial results for fiscal year 2024 and the first quarter of 2025, which did not meet market expectations. The reported underperformance was attributed to unfavorable price and volume changes, coupled with margin pressures.
Despite the recent financial results, Sunwoda Electronic is anticipated to experience an uptick in volume growth starting in the second quarter of 2025. This growth is expected to span across its consumer and electric vehicle (EV)/energy storage system (ESS) battery businesses. Additionally, the company foresees an increase in the average selling price (ASP) within its consumer battery segment, citing rising cobalt prices and adjustments in its sales mix as contributing factors.
Zou’s commentary on Sunwoda Electronic’s outlook remains positive, emphasizing potential share price catalysts. These include the possibility of the company’s consumer battery business growth surpassing market expectations, or its power battery segment reaching a breakeven point or becoming profitable.
Sunwoda Electronic’s forward-looking strategy appears to hinge on the company’s confidence in the growth of its battery business segments. The firm is banking on the acceleration in volume growth and the anticipated ASP increase to drive its financial performance in the near future.
Investors and market watchers will be keeping an eye on Sunwoda Electronic’s progress as it navigates through the challenges presented by market conditions and strives to achieve the growth and profitability outlined by its management and supported by Jefferies’ analysis.
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