Fiserv earnings missed by $0.61, revenue fell short of estimates
Investing.com - Jefferies has downgraded Zhejiang Supcon Technology Co Ltd (SS:688777) stock rating to Hold from Buy, while reducing its price target to RMB45.00 from RMB60.75.
The downgrade follows Zhejiang Supcon’s second-quarter performance, which missed expectations with revenue declining 12% and margins deteriorating, resulting in a 37% drop in net profit.
Jefferies attributes the disappointing results to weak demand in the company’s core downstream markets, specifically the chemical and petrochemical sectors, along with price competition in the distributed control systems (DCS) segment and sluggish overseas growth.
Despite Zhejiang Supcon’s efforts to diversify into software-as-a-service (SaaS), industrial AI, and robotics, these initiatives remain in early stages and cannot compensate for the weak performance in the company’s core business areas.
Jefferies notes that the stock’s valuation at 1.4 times 2025 estimated PEG ratio "is not cheap," and expects consensus forecasts to be revised downward in the near term.
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