Citigroup lowers YIXIN's target price to 3.2 yuan, maintains "Buy" rating

Citigroup published a report stating that YIXIN (02858.HK) performed slightly better than expected last year, with a dividend payout ratio of 70%, resulting in a dividend yield of 5.7%, demonstrating robust execution. The bank believes that the decline in the company's stock price following the earnings release may reflect that the profit guidance of RMB 1.7 billion for the fiscal year 2026 is roughly in line with market expectations, but may be lower than some buyers' expectations.

However, as YIXIN delves deeper into the higher-risk used car market, it should be able to achieve a good balance between returns and risks, which is believed to be generally in line with market consensus. The bank has lowered YIXIN's revenue forecasts for the next two years by 5% each, to RMB 12.5 billion and RMB 13.9 billion, respectively, and adjusted net profit forecasts down by 5% and 6%, to RMB 1.7 billion and RMB 1.8 billion, respectively. Based on a forecast of 12 times adjusted net profit per share this year, the target price has been lowered from HKD 3.5 to HKD 3.2. The rating is maintained at "Buy."