By Yifan Wang
Sinotruk (Hong Kong) Ltd. shares jumped Tuesday despite the truck maker warning that its full-year profit could fall by more than half, as investors held hopes for a rebound in 2023.
The stock rose as much as 6.1% and was recently 3.2% higher at 13.60 Hong Kong dollars (US$1.74).
The gains came after Sinotruk late Monday said it expects net profit for 2022 to fall by 55% to 65% due to China’s macroeconomic slowdown and pandemic-related logistics disruptions, which weighed on truck sales.
But investors looked past the expected earnings slump, with China’s swift reopening and pro-growth policies underpinning the market’s confidence in a quick recovery for Sinotruk in the new year.
Citi analysts in a note called the 2022 earnings guidance “worse than market and Citi expectations.” Still, China’s faster-than-expected reopening and the improving fixed-asset investment and economic activities should support the industry’s rebound, the analysts said.
The analysts raised their target price on Sinotruk to HK$15.50 from HK$12.40 while maintaining a buy call.
Write to Yifan Wang at [email protected]
