According to information obtained, Citi released a research report stating that it engaged with the CFO and Deputy CFO of CHINA LESSO (02128) prior to the company's earnings quiet period. The bank lowered its profit forecasts for Lesso for 2026 to 2028 by between 11% and 18%, reflecting impairments on non-core projects. However, its core domestic business is showing signs of stabilization, with reduced drag from the residential business, which is being offset by strong growth in non-residential segments such as agricultural, industrial, medical, and municipal businesses. Using a valuation basis of 9 times forecasted price-to-earnings ratio for this year (0.5 standard deviations above the historical average), the bank correspondingly raised its target price from HK$6.5 to HK$7, maintaining a "Buy" rating.

Citi believes that Lesso's overseas distribution business has the potential to become a major driver of future growth, with sales expected to increase by more than 50% this year. The bank anticipates that Lesso's core net profit for the second half of last year fell 10% year-on-year to RMB 938 million, and decreased 13% half-on-half, and expects the net profit margin for the second half to slightly decline to 7.4% from 8.7% in the first half of last year. The stock has recently accumulated gains of approximately 20% amid positive sentiment, and the bank views any potential pullback as a buying opportunity. However, within its stock selection preference for China's infrastructure industry chain, the bank's top pick remains Zoomlion (01157), followed by Hangcha Group (603298.SH), and then Lesso.