Damo: Update CSPC Group's (01093) risk-return assessment target price reduced to HK$10.4

The Zhitong Finance App learned that Morgan Stanley released a research report saying that it currently predicts that sales and recurring net profit of CSPC Group (01093) will increase by 5% and 7% respectively in 2026; as the launch of new products is recognized by the market, growth will accelerate to 6% and 10% respectively in 2027. Furthermore, Damo has conservatively lowered the Group's terminal growth rate from 4% to 3.5%. The target price for the cash flow discount method derived from this is HK$10.4 (originally HK$11); the rating has increased.

Damo has updated CSPC Group's risk-return assessment and included the third quarter results. The Group's sales forecast for 2025 to 2026 was lowered by 1% and 2%, respectively, and the 2027 sales forecast remained unchanged. Operating expenses have also been revised in accordance with management guidelines and observed trends. As a result, the estimated recurring net profit for the same period was reduced by 4%, down 4%, and remained unchanged.