Goldman Sachs: Initiates "Neutral" rating on Tingyi (00322) with a target price of 10.7 Hong Kong dollars.

Goldman Sachs released a research report stating that TINGYI (00322) has a "neutral" rating, and the management team reiterated their focus on profit margins. They will increase investments in channels and consumers to cope with rising prices and support market share recovery, with a target price of 10.7 Hong Kong dollars. Master Kong's beverage business has seen a slight negative growth in profit in the third quarter so far, mainly due to the drag from fruit juice and carbonated soft drinks (CSD). However, there was some improvement in August on a quarterly basis, and it is expected that the base effect in September will be more favorable. The management team expects a similar expansion in gross profit margin in the second half of this year compared to the same period last year, based on more favorable sugar costs in the fourth quarter and stricter promotional activities. As for the instant noodle business, sales of Master Kong declined by a single-digit percentage in 7 to 8 due to a sharp rise in prices, lagging behind the positive growth of competitors. The management team expects the market share to gradually recover by the end of the year.