Yamato: Shell-W (02423) structural profit improvement trend continues, target price rises slightly to HK$52

The Zhitong Finance App learned that in response to better cost savings than expected, Yamato raised its 12-month target price for Seashell-W (02423) from HK$51 to HK$52, raised its 2026-2028 earnings forecast per share by 16% to 22%, and reaffirmed the “outperform the market” rating.

Yamato pointed out that Seashell-W's second-quarter earnings revenue and adjusted net profit were 1% and 34% higher than market expectations, respectively, and gross margin increased 6.7 percentage points year-on-year to 28.6%, once again becoming the focus of the market. The bank believes that Shell's ongoing cost structure optimization measures have achieved results in various business segments, and that the contributing profit margins of major business segments have all recorded significant year-on-year improvements. The bank believes that this is an upward profit trend driven by structural factors, so it is sustainable and should pave the way for double-digit earnings per share growth in the second half of the year and beyond, even though the mainland housing market is still weak.