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Johnson Electric (179): reported revenue of US$3.65 billion for the fiscal year ending March 2026, a slight increase of 0.1% year-on-year. However, profit attributable to shareholders plummeted 23% to US$202 million, dragged down by a US$22.4 million impairment charge on intangible assets, rising raw material costs, and a 15.2% increase in the sales and administrative expense ratio due to new business investments. Adjusted net profit, excluding certain non-cash items, also fell 13% to US$234 million. Overall profitability faces significant pressure. Looking ahead, automotive sales are expected to remain weak in the short term, as it will take time to shift the customer base from foreign companies to domestic brands.
Caixin Manufacturing PMI for May
The Caixin Manufacturing PMI for May came in at 51.8, marking the sixth consecutive month of expansion and indicating a continued recovery in the manufacturing sector. However, it's important to note that both output and new orders weakened compared to April. This means that while orders are still increasing and factories are still producing, the momentum is slowing. May's electric vehicle delivery data in China saw a reshuffling: Leapmotor and NIO saw year-on-year growth exceeding 80%, while Jike saw growth exceeding 60%; however, Li Auto's deliveries declined by over 18% year-on-year, contributing to a divergence in the overall market landscape along with other brands.
On Monday, Hong Kong Stock Connect saw a net inflow of HK$4.657 billion, with Akeso Biopharma (09926) experiencing the largest inflow at HK$2.707 billion, followed by Tencent Holdings (00700). Lenovo Group (00992) recorded the largest net outflow at HK$548 million, followed by Xiaomi (1810).
Leung Kai Tong is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to https://apps.sfc.hk/publicregWeb/indi/ADU276/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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