Credit Suisse, which has strengthened its balance sheet by sharply reducing accounts receivable and operating costs, raised its target price to HK $2.25 from HK $1.20 to neutral from underperforming 0057.HK. In order to control the risk, the company even abandoned some orders with harsh terms of accounts receivable.

Credit Suisse said Zhenxiong significantly improved its balance sheet, with net cash rising to HK $408 million in March 2009, compared with HK $135 million in September 2008. However, the bank warned that there were still no signs of a full recovery in sales, especially for exporters, and management expected order flows to deteriorate in overseas markets. Credit Suisse cut Zhenxiong's profit forecast for fiscal year 10-11 by 45%.

The stock closed 7.5 per cent higher at HK $2.44.