On Friday, HSBC adjusted its price target for Nien Made Enterprise Co Ltd shares (8464:TT), a leading manufacturer in the global blinds market, to NT$445 from the previous NT$450. The firm continues to support a Buy rating for the stock despite the price target revision.
The adjustment comes as HSBC revises its earnings per share (EPS) estimates for the company for the years 2024 and 2025. The EPS forecasts have been slightly reduced by 2.6% for 2024 and 0.3% for 2025. This revision reflects HSBC's expectations of lower profit margins in the second quarter of 2024 due to an increased sales mix of ready-made products, which typically yield thinner margins.
HSBC's new stock target price is derived from a discounted cash flow (DCF) analysis and suggests an approximate 21% upside from the current levels. Despite the reduction in the price target, HSBC's outlook for Nien Made remains positive.
The rationale behind maintaining the Buy rating stems from Nien Made's competitive edge in cost and innovative product designs. HSBC believes that these factors will enable Nien Made to continue its leadership in the global blinds market.
In summary, while HSBC has trimmed its stock price target for Nien Made Enterprise, the firm's confidence in the company's market position and growth prospects remains intact, as evidenced by the continued endorsement of a Buy rating.
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