[ET Net News Agency, 24 May 2021] HSBC Qianhai Securities Research lifted its target
price for Man Wah Holdings (01999) to HK$19.6 from HK$19.1 and maintained its "buy"
rating.
The research house said Man Wah's FY2021 net profit growth slightly beat market
estimates for three reasons: (1) product mix improved as its proportion of domestic sales
increased; (2) price hikes for retail products were successful; and (3) income tax
declined due to lower land VAT.
HSBC thinks the rapid growth in the number of stores is due to (1) the rising
penetration rate of recliners and (2) the firm's leading status in the domestic recliner
market, with a market share of more than 50%.
HSBC raised its net profit estimates by 7.2% in FY2022 and 5.4% in FY2023. (KL)