Analyst Edmond Fok of DBS maintained a Buy rating on Horizon Construction Development Limited (9930 – Research Report), with a price target of HK$2.80.
Edmond Fok’s rating is based on several strategic factors that position Horizon Construction Development Limited favorably in the market. Despite a recent decline in the China AWP industry rentals, the company is expected to see revenue and profit growth in the upcoming fiscal years. This growth is attributed to the company’s commitment to upgrading its equipment in response to the construction industry’s increasing focus on environmental protection, safety, and efficiency. Such advancements are anticipated to help Horizon outperform the broader industry with a projected revenue CAGR of 11% from FY23 to FY26.
Additionally, Horizon Construction Development is poised to benefit from market share consolidation in China, where the top players currently hold a minimal market share compared to their US counterparts. The company’s strategic expansion overseas, which has already shown profitability, is another key factor in the positive rating. With plans to increase the revenue contribution from overseas operations significantly by 2028, Horizon is well-positioned to enhance its earnings through higher margins in these markets. Despite a lowered target price, the anticipated earnings growth and stabilization in onshore demand support the Buy rating.
According to TipRanks, Fok is a 3-star analyst with an average return of 23.8% and a 50.00% success rate.