Hong Kong Stock Alert | DONGFANG ELEC (01072) Surges Over 5% Ahead of Interim Results Release, UBS Sets HK$23.6 Target Price

Stock News
Aug 28

DONGFANG ELEC (01072) surged over 5% today. As of press time, the stock was up 5.03% to HK$17.96 with turnover reaching HK$296 million.

On the news front, DONGFANG ELEC will hold a board meeting today to review and approve the company and its subsidiaries' unaudited interim results for the six months ended June 30, 2025.

UBS initiated coverage on DONGFANG ELEC with a "Buy" rating and a target price of HK$23.6. The investment bank forecasts the company's earnings per share to grow at an annual compound rate of 27% from 2024 to 2028, compared to 11% from 2020 to 2024.

UBS expects Chinese power equipment original equipment manufacturers to transition from one-time hardware sales to an annuity-based service model, which could significantly enhance profitability quality and valuation. DONGFANG ELEC has positioned maintenance services as a strategic priority, as service contracts carry gross margins four times higher than equipment sales.

The investment bank also projects that the group's maintenance service gross profit will achieve a 25% compound annual growth rate from 2025 to 2028, contributing 14 percentage points to annual earnings per share growth during this period.

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