According to a research report published by Morgan Stanley, Hongteng Precision's operating profit for the third quarter fell short of expectations, and its rating was downgraded from “increase” to “in sync with the market” due to structural profit margin headwinds and delays in monetization of AI projects, and indicating that AI demand momentum has not yet been transformed into sustainable profit growth to offset weakness in other segments, and that rising raw material prices and slow efficiency of new plants have also seriously dragged down profitability. Damo drastically lowered its target price by 55% from HK$8 to HK$3.6, which is equivalent to 17.4 times the predicted price-earnings ratio in 2027. It believes that the valuation is reasonable in the face of deteriorating demand in the consumer electronics and automotive markets and continued headwinds in profitability. Since coverage began in November last year, the company's earnings have continued to fall short of expectations. Management drastically lowered the operating profit guideline for the full year 2026 from a 70% year-on-year increase to a year-on-year flat rate. The bank lowered Hongteng Precision's earnings per share forecast for 2026, 2027 and 2028 by 23%, 47% and 49% respectively.

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