Citic Lyon: Maintain "Outperform" rating on H&H INTL HLDG (01112) and lower the target price to HK$10

CICC announced in a research report that it maintains a "outperform" rating for H&H Global Holdings (01112) and has lowered the target price to HK$10. The company redeemed $300 million senior notes with a coupon rate of 13.5% on January 25, and replaced them with lower coupon rate notes. The bank expects the company to cut dividends in 2024 to accelerate debt repayment. CICC pointed out that due to the improvement in infant formula milk (IMF) sales and strong sales performance in adult nutrition and care products (ANC) during the Double Eleven sales festival, the decline in sales of H&H's baby nutrition and care products (BNC) will narrow compared to the third quarter of 2024. Looking ahead, sales are expected to recover in 2025, but the EBITDA profit margin is expected to face some pressure, mainly due to increased advertising expenses to support sales expansion.