UOB Kay Hian said it is lowering its target price on Singapore-listed Lizhong Wheel Group Ltd to 0.89 sgd from 1.07 due to Olympics-related restrictions on its operations near Beijing, as well as rising aluminum prices.

"Management said it will be affected by some restrictive regulations as the Olympics nears. Lizhong's Baoding and Tianjin plants are within 150 km from Beijing. In some worst cases, Lizhong might have to cease operations there during the Olympics," UOB said.

UOB added that gross margins for the aluminum wheel maker may undergo moderate pressure as raw material prices rise.

UOB has a "buy" recommendation on the company.

Singapore-listed Lizhong last traded at 0.51 sgd.