The Zhitong Finance App learned that Bank of America Securities released a research report stating that Wanzhou International (00288) operating profit and net profit for the third quarter decreased by 30% and 45%, respectively, compared with 12% and 13% year-on-year in the first nine months. Operating profit for the third quarter was generally in line with market expectations, and net profit fell short of expectations. The bank believes that Wanzhou International's weak performance in the third quarter has long been within market expectations. Bank of America Securities reaffirmed its “buy” rating and lowered the target price from HK$8.5 to HK$8.1.
Considering the reduction in US business guidelines, Bank of America Securities lowered Wanzhou International's 2026 and 2027 earnings forecasts per share by 7% and 3%, respectively, and expected net profit to drop 18% year-on-year to US$1.3 billion in 2026. The bank anticipates that the downward trend in earnings per share will continue until the first quarter of 2027, after which it may be affected by the low base of China and the US, and stabilized from the second quarter of 2027.
The bank believes that Wanzhou International's stock price has dropped 22% cumulatively since the third quarter, reflecting the risk of declining earnings per share. The market regards this stock as a dividend dividend stock. According to the bank's careful estimates, the recurrent dividend per share in 2026 was HK50 cents, down from HK61 cents in 2025. The corresponding payout ratio is about 63% and the dividend rate is about 8%, which is attractive.