Morgan Stanley: Oriental Yuhong (002271) 2026 Targets — Revenue RMB 30bn, Recurring Net Profit RMB 2bn
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Morgan Stanley updates its coverage on Oriental Yuhong (002271.SZ) following recent earnings communications, maintaining an Equal-Weight rating with a target price of RMB 13.00. The current share price as of April 17, 2026, stands at RMB 16.29, implying roughly 20% downside. The company has set its 2026 targets at approximately RMB 30 billion in total revenue, including RMB 4.5 billion from overseas markets, and around RMB 2 billion in recurring net profit, with RMB 140 million generated internationally. Additionally, Oriental Yuhong plans a normalized dividend payout ratio of about 50%.
During the first quarter of 2026, top-line growth was primarily driven by volume increases and the consolidation of Cosocrete. Retail sales surged 36% year-over-year to RMB 3 billion, accounting for 42% of total revenue and effectively boosting gross margins. Engineering channel sales grew 17% to RMB 3 billion, while direct sales contracted 4% to RMB 1 billion. The industry recently implemented price hikes in response to rising raw material costs; if fully executed, these increases should offset cost inflation on new orders. Furthermore, impairments are expected to peak in 2026 at RMB 1.57 billion. As of the end of 2025, net receivables aged over two years stood at roughly RMB 1.2 billion, suggesting overall receivable risks remain manageable.