[ET Net News Agency, 16 July 2020] Goldman Sachs lifted its target price for Tingyi
(Cayman Islands) Holding (00322) to HK$14.3 from HK$13.8 and reiterated its "neutral"
rating.
The research house raised its 2020-22E EPS forecasts for Tingyi by 5-7% mainly to
account for faster growth in the noodles segment and a smaller decline in the beverage
segment. Goldman also expects stronger OPM for both segments on the back of fewer
promotions in the noodles segment and less A&P expense, given lack of large-scale
activities post the COVID-19 outbreak.
For 1H, it now expects Tingyi to grow its sales and recurring net income at 3% and 34%
respectively. For 2H, however, Goldman still expects resilient noodles sales and profit
growth but a decline in beverage profit, given the company's decision to invest more in
A&P to recover the sales loss in 1Q and likely to follow the similar behavior from major
peers in this segment.
Overall, Goldman still looks for 5% sales growth and 6% recurring net profit growth in
2H. (KL)