＜Research＞CLSA Adjusts TPs for NONGFU SPRING (09633.HK), U-PRESID CHINA (00220.HK), TINGYI (00322.HK)

　　China's beverage sector has faced a string of events over the past few months, including several media incidents, the water price war, and TINGYI (00322.HK) +0.240 (+2.540%) Short selling $3.81M; Ratio 19.312% s price hike, a recent CLSA report said. CLSA expects that NONGFU SPRING (09633.HK) +0.800 (+2.370%) Short selling $44.45M; Ratio 26.887% will gradually recover in 2H after a tough 1H on its aggressive promotion of the “green bottle”, even though there could be near-term share price volatility with the release of its interim results at the end of August. Believing that the high-yield theme will continue to play out, especially for U-PRESID CHINA (00220.HK) +0.060 (+0.930%) Short selling $338.56K; Ratio 3.783% , the broker has upgraded U-PRESID CHINA's rating from Hold to Outperform in the light of limited choices of good quality stocks in the consumer sector.

　　CLSA also pointed out that the recovery of NONGFU SPRING's performance is a key factor to watch in 2H, which already appears on track based on CLSA's recent channel checks, even though there could be near-term share price volatility with its interim results indicating slower revenue growth and declining margin. The broker still believes that the high-yield theme will continue to be beneficial to the share price. By comparing U-PRESID CHINA and TINGYI, the dividend yields of both are expected to be around 8%, but the broker prefers U-PRESID CHINA over TINGYI based on the expectation that TINGYI will lose market share in 2H24 after the price hike.

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　　The table below shows CLSA's latest investment ratings and TPs for NONGFU SPRING, U-PRESID CHINA, and TINGYI:

　　Shares | Investment Ratings | TPs

　　NONGFU SPRING (09633.HK) +0.800 (+2.370%) Short selling $44.45M; Ratio 26.887% │Outperform│$47.9 -> $38.6

　　U-PRESID CHINA (00220.HK) +0.060 (+0.930%) Short selling $338.56K; Ratio 3.783% │Hold -> Outperform│$5 -> $6.7

　　TINGYI (00322.HK) +0.240 (+2.540%) Short selling $3.81M; Ratio 19.312% │Hold│$8 -> $9.6

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-22 12:25.)

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