[ET Net News Agency, 25 June 2019] Daiwa Research lowered its target price for Want
Want China (00151) to HK$7.7 from HK$8.2 and maintained its "buy" rating.
The research house hosted a post-results NDR for Want Want last week with the following
takeaways (1) management targets to expand revenue for all product categories in FY2020,
(2) key revenue drivers include new channels (baby stores, e-commerce) and development of
overseas markets, (3) the gross margin is likely to expand in FY2020 on costs reduction.
Daiwa cut its FY2020-21 revenue forecasts by 4-5%, but its EPS by only 2%, based on
management's more conservative targets for the coming years. It now recommended Want Want
as a yield stock given the maturity of most of its existing products in China. (KL)