＜Research＞BofA Securities Cuts WANT WANT CHINA (00151.HK) TP to $4.8, Reiterates Rating Underperform

　　WANT WANT CHINA (00151.HK) +0.380 (+8.617%) Short selling $7.55M; Ratio 13.126% 's FY2023 sales grew 2.9% YoY, slightly missing BofA Securities' estimation, BofA Securities released a research report saying. However, net profit after tax rose 18.4% to RMB2.24 billion, 7% higher than BofA Securities' expectation, mainly due to higher-than-expected gross profit margin.

　　BofA Securities correspondingly raised its FY2024/ FY2025 EPS forecasts for WANT WANT CHINA by 4%/ 1%, but cut its target price to $4.8 from $5, given a slower sales growth outlook and industry-wide de-rating.

　　Related NewsWANT WANT CHINA Annual NP Hikes 18.4% to RMB3.99B; Final DPS US$3.3 Cents

　　BofA Securities believed that, although the sales growth of rice cracker/snack food slowed down, the core dairy business has a good base. However, BofA Securities saw headwinds on the business, given the current weak demand and industry-wide de-stocking.

　　The double-digit decline in the sales of liquid milk of MENGNIU DAIRY (02319.HK) +0.620 (+4.448%) Short selling $84.26M; Ratio 16.766% and Yili in recent months supports the above expectation.

　　In addition, BofA Securities expected weak raw material costs to signal another good year for WANT WANT CHINA's profit in FY2024.

　　Related NewsCLSA Chops WANT WANT CHINA (00151.HK) TP to $4.5, Rates Underperform

　　However, as WANT WANT CHINA's gross profit margin has already close to its historical high in FY2019-FY2020, coupled with intensified price competition, BofA Securities believed that there is less upside room in the future, and reiterated rating at Underperform for WANT WANT CHINA.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-06-25 16:25.)

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