CLSA has released a research report maintaining its Outperform rating and a target price of HK$48 for Shenzhou International (02313).

The management's overall tone was broadly in line with the briefing on the company's first-half results this year, with investors focusing on order visibility, trends among major brand customers, Nike's restructuring in China, order momentum in the second half, and the trajectory of gross margin recovery.

The investment bank noted that management views the third quarter as a seasonal trough between the summer and Christmas periods, and holds some caution regarding the US midterm elections. A sequential improvement is expected in the second half, with Adidas and Uniqlo remaining the main drivers, while the year-on-year declines for Nike and Puma are expected to narrow compared with the first half.