Latest news with #CGSI
Business Times
23-05-2025
- Automotive
- Business Times
China EV maker XPeng set to turn profitable, says CGSI, lifting target price for the stock
[SINGAPORE] Chinese EV maker XPeng could soon turn profitable, as strong vehicle sales and consensus-beating financials paint a bullish outlook, securities firm CGSI has said. CGSI analysts on Thursday (May 22) raised the firm's target price to HK123.80 from HK121.40, and reiterated their 'add' call. XPeng shares last closed at HK81.30 on Thursday. Its shares are also traded in the US. The analysts cited higher delivery forecasts, robust EV shipping growth and 'significantly improved' Q1 results, which beat consensus from CGSI and Bloomberg. CGSI analysts Ray Kwok and Sera Chen, highlighting the firm's surpassing of estimates with its improved performance, said: 'We expect XPeng to become profitable in the fourth quarter of FY2025, thanks to ongoing production cost reductions and economies of scale from more EV deliveries,' they said. Q1 results beat consensus XPeng's narrower net loss was around 60 per cent better than CGSI analysts' estimates, they added. '(It) reported significantly improved Q1 2025 results, with non-GAAP (Generally Accepted Accounting Principles) net loss narrowing to 426 million yuan – (compared to) net losses of 1.4 billion in Q1 2024 and 1.4 billion in Q4 2024 – beating our and Bloomberg consensus forecasts of 825 million yuan net loss,' they said. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up This was due to improved vehicle profit margin (VPM) and stable technological services income (TSI) from Volkswagen, for which XPeng provides technical research and development and electrical/ electronic architecture services. Additionally, XPeng's Q1 vehicle sales rose 159 per cent year on year to 14.4 billion yuan, driven by record numbers of EV deliveries, which spiked 331 per cent year on year to 94,000 units. Revenue from services rose to 1.4 billion yuan, 44 per cent higher on year, as gross profit margin climbed to 15.6 per cent, up 2.7 per cent year on year, thanks to robust TSI and better VPM, they said. Forecasts raised, fresh launches in pipeline XPeng expects to deliver between 102,000 and 108,000 EV units in Q2 FY2025, fuelled by five upgraded models and rising overseas sales, said Kwok and Chen. The upgraded models include the X9 MPV, Mona M03 Max sedan and G7 SUV models, slated for April, May and June, respectively. The group also plans to unveil two models in the second half of 2025. The next-generation P7, which features right-hand drive for international markets, will be released in Q3 of 2025; an extended-range electric vehicle model will debut in Q4 of 2025. Kwok and Chen said that the launches aim to diversify XPeng's product portfolio to serve a broader customer base. 'We lift our forecasts on XPeng's EV delivery in FY2025/ FY2026/ FY2027 to 430,000/ 570,000/ 700,000, reflecting robust market response and higher overseas shipments.' New models launches to spur China growth Beyond higher overseas sales, Kwok and Chen think that XPeng could make greater inroads into China's EV market. 'We believe XPeng is the favoured EV manufacturer among middle-class Chinese consumers because of its advanced driver assistance system (Adas) software and in-car intelligent operating system capability,' they said. They add that XPeng is currently a leader in the Chinese Adas market. The company plans to release around 20 models between 2025 and 2026, ranging from low-end sedans to high-end MPVs, to target diverse price ranges and consumer niches, they said. 'We expect XPeng's new models for FY2025 and FY2026 to drive its longer-term market share gains in China's EV sector.'
Business Times
22-05-2025
- Business
- Business Times
CGSI downgrades Delfi, cuts target price as high cocoa prices sour sentiment
[SINGAPORE] CGS International (CGSI) has downgraded its recommendation on chocolate confectioner Delfi to 'hold', from 'add' previously, and slashed its target price by more than 19 per cent to S$0.71. 'We think weaker consumer sentiment, coupled with elevated cocoa prices and a weaker Indonesian rupiah against the US dollar, could pressure profitability in the near term,' said CGSI analysts Tay Wee Kuang and Tan Jie Hui in a report on Wednesday (May 21). The analysts have trimmed their revenue expectations, and cut their earnings per share (EPS) forecasts for FY2025 to FY2027 by 15.5 to 17.4 per cent. The new target price – lowered from S$0.88 previously – is still pegged to a price-to-earnings ratio of 11 times for FY2026, which is at 0.5 standard deviation below the mean due to expectations of weaker profitability. This also accounts for a negative translation impact from the weakening greenback against the Singapore dollar. Despite the gloomier outlook as Delfi braces for 'macroeconomic headwinds', the analysts noted that its revenue for the first quarter ended March was largely in line with consensus estimates. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Delfi's Q1 revenue dipped 0.5 per cent year on year to US$149.8 million, from US$150.7 million previously. Revenue from Indonesia fell 4 per cent to US$99.3 million. However, on a constant currency basis, excluding the impact of a weaker rupiah against the US dollar, net sales would have been flat. Delfi attributed the resilient sales in Indonesia to better sales for its own brands as a result of its increased promotional spending. This helped offset decreased sales of its agency brands, where they saw a cut in promotional spending from agency partners. Earnings before interest, taxes, depreciation and amortisation dropped 27 per cent to US$17 million in Q1. This suggests, the analysts said, 'an increase in operating expenses that resulted in poorer operating leverage'. Despite the declining profitability, the research house noted that Delfi's cash flow generation still remained healthy. In the first quarter, the chocolate confectionery generated a free cash flow of US$34.4 million, up from US$23.1 million in the same year-ago period. It also saw an improvement in its cash balance to US$70.4 million. As at 2.30 pm on Thursday, shares of Delfi are trading flat at S$0.715.
Business Times
21-05-2025
- Business
- Business Times
Labubu maker Pop Mart flagged for global expansion potential; CGSI initiates coverage
[Hong Kong] CGS International (CGSI) has initiated coverage on Pop Mart's stock with an 'add' rating, citing the group's transformation from a toy retailer to an intellectual property (IP)-centric platform. CGSI set the price target for the Chinese stock at HK$249.60, versus its last price of HK$208 at Tuesday's (May 20) close. That represents an upside of about 20 per cent. 'We expect Pop Mart to trade at a premium vs its global peers, considering Pop Mart's faster growth momentum and larger potential for global expansion,' said CGSI analysts in the note. Founded in 2010, Pop Mart first rose to fame due to its blind boxes, with popular characters including Labubu, Skullpanda and more. CGSI analysts noted that Pop Mart's management said it will focus on expanding to the US and Europe markets, versus South-east Asia in 2024. It plans to open 100 new stores in overseas markets. It said that the South-east Asia (SEA) market is key to Pop Mart's global expansion: it contributed 50 per cent of its overseas revenue in FY2024. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Currently, Pop Mart has a higher penetration rate in East Asia with 49 retail stores, compared with 20 in the US and 15 in Europe in 2024. CGSI estimates the company has potential to reach a total of 350 overseas stores by FY2027. 'SEA market's pop toy industry is still in the early stage, with a relative small market size currently,' the note said. 'We believe that SEA's pop toy market will achieve faster growth than the world average.' CGSI named factors such as region's higher proportion of youth, increasing penetration rate of social media and e-commerce, and growing disposable income. The securities firm forecasts its domestic revenue to rise by 38 per cent in FY2025, and its overseas revenue to hit a sales compound annual growth rate of 68 per cent between FY2024 and FY2027. Pop Mart has successfully transformed from a toy retailer to an IP-centric platform, shifting from product sales to IP development and diversified operations, CGSI noted. Besides trendy toys, Pop Mart's IP is also widely used in cultural and creative products, food, cosmetics and other fields, it said. 'We also observe that Pop Mart is gradually expanding into theme parks, games and animated cartoons,' said CGSI. The firm opened its first city park, Pop Land, in September 2023. In June 2024, it launched its first self-developed mobile game Dream Home, marking 'another frontier in IP content diversification'. 'We believe (Pop Mart) has built up a competitive advantage in IP platform and operations, and exploring multi-category mediums to improve IP commercialisation. We like the company due to its huge potential in overseas markets, and IP commercial value (beyond toys) in the future,' CGSI said. It added that any impact from US tariffs will be limited for Pop Mart, as they will be offset mainly by price hikes of American products.
Business Times
21-05-2025
- Business
- Business Times
Labubu maker Popmart flagged for global expansion potential; CGSI initiates coverage
[Hong Kong] CGS International (CGSI) has initiated coverage on Pop Mart's stock with an 'add' rating, citing the group's transformation from a toy retailer to an intellectual property (IP)-centric platform. CGSI set the price target for the Chinese stock at HK$249.60, versus its last price of HK$208 at Tuesday close (May 20). That represents upside of about 20 per cent. 'We expect Pop Mart to trade at a premium vs its global peers, considering Pop Mart's faster growth momentum and larger potential for global expansion,' said CGSI analysts in the note. Founded in 2010, Pop Mart first rose to fame due to its blind boxes, with popular characters including Labubu, Skullpanda and more. CGSI analysts noted that Pop Mart's management said it will focus on expanding to the US and Europe markets, versus South-east Asia in 2024. It plans to open 100 new stores in overseas markets. It said that the South-east Asia (SEA) market is key to Pop Mart's global expansion: it contributed 50 per cent of its overseas revenue in FY2024. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Currently, Pop Mart has a higher penetration rate in East Asia with 49 retail stores, compared with 20 in the US and 15 in Europe in 2024. CGSI estimates the company has potential to reach a total of 350 overseas stores by FY2027. 'SEA market's pop toy industry is still in the early stage, with a relative small market size currently,' the note said. 'We believe that SEA's pop toy market will achieve faster growth than the world average.' CGSI named factors such as region's higher proportion of youth, increasing penetration rate of social media and e-commerce, and growing disposable income. The securities firm forecasts its domestic revenue to rise by 38 per cent in FY2025, and its overseas revenue to hit a sales compound annual growth rate of 68 per cent between FY2024 and FY2027. Pop Mart has successfully transformed from a toy retailer to an IP-centric platform, shifting from product sales to IP development and diversified operations, CGSI noted. Besides trendy toys, Pop Mart's IP is also widely used in cultural and creative products, food, cosmetics and other fields, it said. 'We also observe that Pop Mart is gradually expanding into theme parks, games and animated cartoons,' said CGSI. The firm opened its first city park, Pop Land, in September 2023. In June 2024, it launched its first self-developed mobile game Dream Home, marking 'another frontier in IP content diversification'. 'We believe (Pop Mart) has built up a competitive advantage in IP platform and operations, and exploring multi-category mediums to improve IP commercialisation. We like the company due to its huge potential in overseas markets, and IP commercial value (beyond toys) in the future,' CGSI said. It added that any impact from US tariffs will be limited for Pop Mart, as they will be offset mainly by price hikes of American products.
Business Times
21-05-2025
- Business
- Business Times
CGSI flags global expansion potential for Pop Mart, maker of Labubu toys; initiates coverage
[Hong Kong] CGS International (CGSI) has initiated coverage on Pop Mart's stock with an 'add' rating, citing the group's transformation from a toy retailer to an intellectual property (IP)-centric platform. CGSI set the price target for the Chinese stock at HK$249.60, versus its last price of HK$208 at Tuesday close (May 20). That represents upside of about 20 per cent. 'We expect Pop Mart to trade at a premium vs its global peers, considering Pop Mart's faster growth momentum and larger potential for global expansion,' said CGSI analysts in the note. Founded in 2010, Pop Mart first rose to fame due to its blind boxes, with popular characters including Labubu, Skullpanda and more. CGSI analysts noted that Pop Mart's management said it will focus on expanding to the US and Europe markets, versus South-east Asia in 2024. It plans to open 100 new stores in overseas markets. It said that the South-east Asia (SEA) market is key to Pop Mart's global expansion: it contributed 50 per cent of its overseas revenue in FY2024. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Currently, Pop Mart has a higher penetration rate in East Asia with 49 retail stores, compared with 20 in the US and 15 in Europe in 2024. CGSI estimates the company has potential to reach a total of 350 overseas stores by FY2027. 'SEA market's pop toy industry is still in the early stage, with a relative small market size currently,' the note said. 'We believe that SEA's pop toy market will achieve faster growth than the world average.' CGSI named factors such as region's higher proportion of youth, increasing penetration rate of social media and e-commerce, and growing disposable income. The securities firm forecasts its domestic revenue to rise by 38 per cent in FY2025, and its overseas revenue to hit a sales compound annual growth rate of 68 per cent between FY2024 and FY2027. Pop Mart has successfully transformed from a toy retailer to an IP-centric platform, shifting from product sales to IP development and diversified operations, CGSI noted. Besides trendy toys, Pop Mart's IP is also widely used in cultural and creative products, food, cosmetics and other fields, it said. 'We also observe that Pop Mart is gradually expanding into theme parks, games and animated cartoons,' said CGSI. The firm opened its first city park, Pop Land, in September 2023. In June 2024, it launched its first self-developed mobile game Dream Home, marking 'another frontier in IP content diversification'. 'We believe (Pop Mart) has built up a competitive advantage in IP platform and operations, and exploring multi-category mediums to improve IP commercialisation. We like the company due to its huge potential in overseas markets, and IP commercial value (beyond toys) in the future,' CGSI said. It added that any impact from US tariffs will be limited for Pop Mart, as they will be offset mainly by price hikes of American products.
