JP Morgan expects COWELL to see strong profit growth in the next two years, with a target price of 44 yuan, recommending "buy"

JP Morgan's research report indicates that in the fourth quarter of last year, COWELL (01415.HK) underperformed the Hang Seng Index, which is believed to be due to market concerns over rising memory prices leading to potential weakness in iPhone demand. However, the bank believes the market reaction is excessive, as its research shows that orders this year are resilient, and it expects electronic manufacturing services shipments to grow by 8% year-on-year in the first half of the year.

At the same time, the bank believes that the adjusted iPhone product line in the second half of this year will benefit COWELL, as its business proportion for the Pro and Pro Max models is relatively high, and its market share continues to expand. The bank also anticipates that the company will gain additional market share in the main rear camera module field by 2027.

The bank has raised its earnings forecasts for 2025 to 2027 by 3% to 9%, expecting earnings in 2026 and 2027 to grow by 23% and 26% year-on-year, respectively, and believes the company's valuation should be reassessed, reiterating a "Buy" rating with a target price of HKD 44