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<Research> Citi Cuts VTECH HOLDINGS (00303.HK) TP to HKD69; 2H FY26 Results Miss
Recommend 5 Positive 13 Negative 9 |
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Citi published a report lowering its FY2027-28 EPS forecasts for VTECH HOLDINGS (00303.HK) by 16% to 17% and cutting its TP from HKD76 to HKD69, mainly due to weaker-than-expected performance in 2H FY2026. The earnings miss was primarily attributable to the impact of US tariffs, with US market sales falling short of expectations, coupled with a decline in the CMS business. The broker introduced its FY2029 estimates and projected a three-year EPS CAGR of 5.5%. According to the report, at the analyst briefing, management guided that revenue will return to positive growth in FY2027, but gross margin will come under pressure, mainly due to rising costs of raw materials such as ICs/memory and plastics. Despite the earnings decline, the company maintained a high payout ratio of about 100%. Citi expected the share price may see short-term correction amid broad-based earnings downgrades by the market. However, given the forecast dividend yield of about 7% for FY2027, it viewed this as a buying opportunity. The TP was lowered from HKD76 to HKD69, with a rating of Buy. (ha/da) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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