JPMorgan upgrades Centre Testing stock rating to neutral

Published 03/06/2025, 09:08
JPMorgan upgrades Centre Testing stock rating to neutral

On Tuesday, JPMorgan analysts upgraded Centre Testing International Group Co Ltd (SHE:300012) stock rating from underweight to neutral. The analysts also adjusted the company’s price target to RMB11.00 from RMB10.00.

The decision to upgrade follows a substantial drop in Centre Testing’s stock, which has fallen approximately 25% compared to the CSI300 since reaching its peak in early October. This decline comes as consensus estimates have been lowered by about 15%, aligning more closely with JPMorgan’s projections.

During a recent meeting with Centre Testing, JPMorgan noted signs of stabilization in market demand. The analysts observed early signs of recovery in sectors such as medical and drug testing and semiconductor testing, which were lagging in 2024.

Despite these positive developments, JPMorgan chose not to upgrade the stock to overweight. The analysts cited limited visibility regarding the recovery of domestic demand and the ongoing turnaround of recent mergers and acquisitions as factors requiring more time to materialize.

JPMorgan updated its model to reflect the latest guidance and first-quarter results for 2025. The price target adjustment is based on a discounted cash flow valuation extended to December 2026, resulting in a FY26E price-to-earnings multiple of 16x and a projected 12% earnings compound annual growth rate over FY25-27E.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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