According to the report released by Daiwa, due to lower-than-expected sales in June, reduced operating expenses and other income, it has lowered its sales and net profit forecast for yihai intl (01579.HK).

It is expected that yihai intl's total sales in the first half of the year will increase by 11%, lower than the initial expected growth of 17%, due to weaker-than-expected growth momentum in May and June. The bank believes that, with the favorable factor of raw material prices, the gross margin will slightly expand. Due to reduced government subsidies and possible forex losses, net profit for the first half of the year is expected to decline by 13% year-on-year.

Daiwa maintains a 'synchronized with the market' rating for yihai intl. The target price has been lowered from 17.6 yuan to 13.2 yuan. The bank believes that the stock valuation requirements are not high, but still holds a wait-and-see attitude as it has not seen any factors that will effectively drive long-term sales.