CICC has released a research report predicting that Yihai International (01579.HK) will continue to steadily increase its revenue. It is expected that its revenue will increase by about 10% year-on-year in the first half of this year, with both related party and third-party revenues increasing by about 10%. However, due to the expected decrease in forex gains and government subsidies compared to the same period last year, it is currently predicted that profits in the first half of the year will decrease by 14% year-on-year to approximately 0.31 billion RMB, slightly lower than the market expectation.

CICC has lowered its profit forecast for the company for the next two years by 6.9% each, to 0.87 billion and 0.95 billion RMB respectively, to reflect the expected decrease in gross margin. It maintains a 'shareholding' rating, believing that its dividend return of approximately 7% is very attractive. In response to the lower industry valuation, the target price is lowered to 15 yuan, corresponding to a forecast PE ratio of approximately 16 and 15 times for this and next year, maintaining an 'outperforming the industry' rating.