Estun Automation Co Ltd Class A

002747: XSHE (CHN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	¥76.30	Rxlt	Bmyqsdsf

Estun Automation Earnings: Weak Demand Hurts Margins; Fair Value Estimate Lowered 15% to CNY 11.30

Cheng Wang

Sep 2, 2024

Estun’s net loss of CNY 80 million in the second quarter is in line with preliminary guidance and reflects sluggish downstream demand, notably in the solar industry, coupled with intense price competition. We now factor in weaker demand, leading to 5%-10% cuts to our revenue forecasts for 2024-28 and 14%-34% reductions in our net income estimates for 2025-28. We project Estun to stay profitable in 2024, but with a thin 0.6% net margin. Consequently, we cut our fair value estimate by 15% to CNY 11.30 per share, and consider the shares fairly valued.

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