Equity Analysis /
Hong Kong

HK : Ju Teng - Margin improvement to drive 2022 performance

    Mark Po
    Mark Po

    Research Analyst

    CGS-CIMB
    25 March 2022
    Published by

    Ju Teng reported its 2021 results earlier, which show a recovery hoh in 2H21 vs. 1H21, but the magnitude was lower than expected. The Company’s 2021 performance was hit by an unfavourable product mix, Rmb appreciation and higher logistics costs. But the impact of the ASP hike is expected to emerge in 2022. Overall shipments may see weakness, but a pick-up in the commercial segment is expected to drive shipments of metals casings. The high requirements of Windows 11 are expected to drive replacement demand. Ju Teng’s soft 2021 net profit figures have been priced in, in our view. We maintain our ADD rating with a higher target price of HK$2.28. The upward revision is due mainly to a higher book value (our target P/B ratio remains unchanged at 0.4x).