The Zhitong Finance App learned that Lyon released a research report stating that the target price for the Ningde Era (03750) was lowered from HK$770 to HK$670 to reflect the decline in the valuation multiplier for electric vehicle batteries, energy storage systems, battery materials and resources businesses, and maintain a “outperforming the market” rating. The bank believes that the market seems to have reflected a significant slowdown in the company's profit growth in 2027, but it may not be until the first quarter of 2027 to have a clearer judgment on demand for energy storage systems and electric vehicle batteries, and stock prices may remain fluctuating in the range.
Lyon pointed out that according to the historical valuation trend of the Ningde era, assuming that the 13 times predicted price-earnings ratio is the bottom of its valuation, the current valuation is equivalent to about 11.5 times the 2027 projected price-earnings ratio. The bank's profit forecast is similar to market expectations. If the bottom of the valuation is 13 times the 2027 price-earnings ratio forecast is reversed, the current stock price reflects that the market has taken into account the 2027 profit forecast and the expectation that it will be lowered by about 12%.
The bank estimates that Ningde Era's net profit in 2027 will be 116 billion yuan, an increase of 20% over the previous year. According to the scenario implied by the current stock price, net profit would drop to 102 billion yuan, and the year-on-year increase would also drop to 6%. The slowdown in growth reflected in the market may be due to a slowdown in demand for energy storage systems and electric vehicle batteries, as well as a decline in profit margins.
The bank believes that the market seems to have reflected a significant slowdown in the company's profit growth in 2027, but it may not be until the first quarter of 2027 to make a clearer judgment on demand for energy storage systems and electric vehicle batteries, which may then be a factor driving the stock price to rise again.
The bank continued that with the exception of the 2026 third quarter results announced on October 20, there seems to be no other obvious positive catalyst in the short term. The impasse between long and short is expected to be difficult to resolve in the short term, and the company's stock price may remain fluctuating in the range until the first quarter of 2027.