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Investing.com - Jefferies downgraded Hundsun Technologies Inc (SS:600570) stock rating to Underperform from Hold, while raising its price target to RMB28.64 from RMB27.47.
The downgrade follows Hundsun’s second-quarter revenue decline of 15%, which fell 7% below consensus estimates due to weak client demand and the company’s reduction of non-core business activities.
Despite revenue challenges, Hundsun’s operating profit grew 2%, exceeding consensus by 3%, which Jefferies attributes to cost control measures. Net profit surged 247%, significantly beating expectations largely due to non-operating items.
The research firm noted deteriorating performance across Hundsun’s business segments, with revenue declines in wealth management, asset management, and institution IT services, accompanied by worse gross margins.
Jefferies also highlighted that the Xinchuang-driven core system upgrade has slowed due to project complexity and weak client budgets, adding that Hundsun’s recent stock re-rating was driven by broader market rally rather than fundamental business improvements.
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