Citibank: The strong performance of Lanqi Technology (06809) and share repurchases help stabilize stock price fluctuations and maintain a “buy” rating

The Zhitong Finance App learned that Citi released a research report stating that the target price for Lanqi Technology (06809) Hong Kong stock was set at HK$305, corresponding to the predicted price-earnings ratio of 66 times in 2027, and the rating would maintain a “buy” rating. Citi said that Lanqi Technology's H shares provided a rare opportunity for international investors to participate in the expansion of AI data centers in China and the world. Its strong AI theme was favored by international investors, leading to a premium for H shares over A-shares.

Lanqi Technology announced strong initial results for the first half of 2026. Net profit for the second quarter ranged from 1,053 billion yuan to 1,253 billion yuan, up 66% to 98% year-on-year, higher than general market expectations and the bank's expectations of 37% and 42% respectively, mainly driven by higher revenue scale, gross margin expansion and investment return. Revenue for the period increased 33% year-on-year to RMB 1,884 billion. The supermarket and the bank expected 6% and 11% respectively. Among them, interconnect chip revenue increased 28% year over year to RMB 1,694 billion. DDR5 RCD shipments continued to grow, and the share of Gen 3 and Gen 4 was further expanded.

The bank mentioned that although the news that South Korean prosecutors raided the relevant office due to suspected price monopoly collusion caused stock prices to fall, and the investigation is still ongoing and may cause further stock price fluctuations, the bank believes that the strong 2026 performance forecast, plus the 300 million to 600 million yuan A-share repurchase plan announced by management, should help stabilize stock prices.