The Zhitong Finance App learned that Morgan Stanley released a research report saying that it is believed that the recent supply chain trough has passed, and Chuangke Industrial (00669) is expected to achieve a multi-year profit upward cycle, raising the target price by 7.4%, from HK$108 to HK$116, and maintaining the “gain” rating.

Damo said that the increase in I&T's target price mainly reflects an increase in profit forecasts and a 23 times target price-earnings ratio. The price-earnings ratio for 2024-2026 is 12 times the profit growth ratio (PEG). Damo believes that although the stock has outperformed the market over the past year, the strengthening of the industry and earnings cycle will drive the re-rating.

Furthermore, recent supply chain inspections show that Chuangke Industrial is steadily upgrading. Chuangke Industrial's recent sales volume is stable, requires parts inventory, or is optimistic about business prospects for the second half of 2024, so it is preparing for a further rise in demand. According to the report, Damo believes that Chuangke Industrial will maintain strong performance and expand its market share. It now predicts a 7% increase in revenue in 2024, an increase of 6%, while profit growth is expected to reach 20%; in 2025, revenue is forecast to increase by 10% and profit increase by 22%.