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Investing.com - HSBC downgraded KLN Logistics Group Ltd (HK:636) (OTC:KRRYF) from Hold to Reduce on Friday, while raising its price target to HK$8.00 from HK$7.70.
The Hong Kong-based logistics company has seen its share price rally 38% year-to-date including dividends, outperforming the Hang Seng Index’s 29% gain and surpassing both its regional and European peers.
HSBC noted that KLN’s stock now trades at a consensus 12-month forward price-to-earnings ratio of 12.4x, which is 1.1 standard deviations above its mean since listing and the highest level since March 2022.
The bank cited a challenging outlook for KLN’s International Freight Forwarding (IFF) business, which has greater exposure to the Trans-Pacific route, as a key concern for the company’s future performance.
HSBC also pointed to slow Integrated Logistics (IL) recovery in China and Hong Kong as factors that would likely weigh on the company’s profitability and remain an overhang on the share price.
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