U-PRESID CHINA (00220) Maintain "Buy" Rating, Target Price Raised to HKD 9.7

Yamato released a research report stating that it maintains a "buy" rating on U-PRESID CHINA (00220), with the target price raised from 8.1 Hong Kong dollars to 9.7 Hong Kong dollars. The earnings per share forecast for fiscal year 2025 to 2026 remains basically unchanged. The performance of the second half of fiscal year 2024 for U-PRESID CHINA met market and the bank's expectations. The bank stated that even though the base comparison for the first quarter of fiscal year 2024 is normal, the growth momentum of noodles and beverages further accelerated in the first quarter of fiscal year 2025, highlighting strong distributor demand entering into 2025. The bank predicts that the revenue growth of the noodle business in fiscal year 2025 for U-PRESID CHINA will accelerate from 2.6% to 4.5% year-on-year; beverage revenue growth will also increase from 8.2% to 8.9%. The bank also expects that the gross profit margin for fiscal year 2025 will expand from 32.5% to 33.7%, mainly due to the possible continued shift in product mix towards beverages as a result of fluctuating raw material prices, higher factory utilization rates due to sales growth, and offsetting of promotion reductions.