＜Research＞Citi Downgrades TRAVELSKY TECH & CHINASOFT INT'L to Neutral, Prefers KINGDEE INT'L

　　Citi Research noted in a report that it has shifted towards caution in the Mainland IT and software sectors, and saw a higher risk that various companies would deliver worse-than-expected results for 1H24 or 2Q24. Stagnant macro markets and weak customer IT budgets or demand are reflected in missed guidance for business-to-business software companies. Although cost containment is partially offsetting revenue pressures, operational deleveraging may occur as pressures continue to build. Revenue or earnings clarity is constrained by the fact that some companies are valued on by P/S ratio, and weakening investor confidence may weigh on valuations in the event of a weak market or continued poor results.

　　Citi downgraded TRAVELSKY TECH (00696.HK) -0.210 (-2.395%) Short selling $2.13M; Ratio 7.365% and CHINASOFT INT'L (00354.HK) -0.090 (-2.387%) Short selling $4.14M; Ratio 15.556% to Neutral. The broker believed TRAVELSKY will take longer to recover earnings amid rising cost pressures, while CHINASOFT's 1H24 performance is at risk on the downside amid weak IT spending. In addition, the broker maintained VENUSTECH (002439.SZ) +0.110 (+0.758%) as its top pick because of China Mobile's clearer IT spending. Citi projected KINGDEE INT'L (00268.HK) -0.160 (-2.730%) Short selling $14.00M; Ratio 26.128% 's risk-reward profile to improve, believing the company's correction has been overdone.

　　Related NewsG Sachs Cuts KINGDEE INT'L (00268.HK) TP to $12.13, Drops Long-term Free Cash Flow Forecast

　　The broker dropped its target price on TRAVELSKY from $12 to $9.2 and lowered its target price on CHINASOFT from $5.7 to $4.1.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-29 16:25.) (A Shares quote is delayed for at least 15 mins.)

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