JPMorgan downgrades Universal Scientific Industrial stock on growth concerns

Published 13/06/2025, 15:48
JPMorgan downgrades Universal Scientific Industrial stock on growth concerns

JPMorgan downgraded Universal Scientific Industrial Shanghai (601231:CH) from Overweight to Neutral on Friday, while lowering its price target to RMB15.00 from RMB19.00.

The investment bank cited "muted revenue growth" as a key factor in its decision, pointing to soft System-in-Package (SiP) orders and a mixed outlook for Electronics Manufacturing Services (EMS) demand. JPMorgan noted recovering industrial demand but shrinking cloud and automotive orders for the company.

Margin pressure due to "insufficient utilization amid its globalized capacity" was identified as another concern by the firm. JPMorgan also addressed investor interest in Universal Scientific’s SiP exposure in artificial intelligence and augmented reality glass segments, but stated that "contribution should be limited."

The bank lowered its earnings forecasts for Universal Scientific Industrial, projecting a 3% revenue compound annual growth rate (CAGR) and a 14% earnings CAGR for 2024-2027. JPMorgan extended its price target timeline from June 2025 to June 2026.

The new RMB15 price target is based on a 14x one-year forward price-to-earnings ratio, up from the previous 13x multiple due to "a change in market sentiment," according to JPMorgan. The firm believes Universal Scientific’s "share price upside could be limited in the next 6-12 months."

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.