HK Stock Market Move | U-PRESID CHINA (00220) falls more than 3% as third-quarter profit growth falls short of expectations. The institution has revised down its profit forecast and target price.

U-PRESID CHINA (00220) fell more than 3% as of the time of writing, down 3.06% to HKD 6.98, with a trading volume of HKD 18.45 million. On the news front, Macquarie released a research report stating that U-PRESID CHINA's third-quarter profit increased by 13% year-on-year, lower than the bank's expectations, mainly due to investments in branding and freezer cabinets, as well as rising logistics costs. However, the company saw accelerated business growth in October, with sales of Tangdaren cup noodles rebounding after a slight decline in the third quarter. The bank has lowered its profit forecast for U-PRESID CHINA for 2024 to 2026 by 2.2%, 4%, and 2.7% respectively, to reflect the third-quarter performance and higher advertising and promotional expenses. The target price has been lowered by 3% to HKD 9.00 from HKD 9.30. Goldman Sachs also stated that the company's third-quarter profit increased by 13% year-on-year to RMB 669 million, falling short of the bank's expected increase of over 30%. Although gross margin expanded by over 2 percentage points, it was offset by higher sales expenses. The bank has lowered its profit forecast for U-PRESID CHINA for 2024 to 2026 by 8 to 10%, lowering the target price from HKD 8.04 to HKD 7.50 and downgrading the investment rating from "buy" to "neutral," to reflect potential pressure on commodity costs and uncertain prospects for food sales growth next year.