Morgan Stanley: Raises target price of Want Want China (00151) to 5.3 Hong Kong dollars, maintains "in line with market" rating.

Morgan Stanley released a research report stating that the target price of WANT WANT CHINA (00151) has been raised by 10%, from 4.8 Hong Kong dollars to 5.3 Hong Kong dollars, maintaining a "synchronized with the market" rating. Morgan Stanley considers the strong performance and growth prospects of Want Want in the fiscal year 2024, and largely maintains the sales forecast for the fiscal years 2025-2026 (ending March 31). The gross profit margin forecast for the fiscal years 2025-2026 has been increased by 0.4 percentage points, reflecting better-than-expected performance. However, the cost of bulk milk powder will put pressure on profit margins. Morgan Stanley has increased the operating profit margin forecast for the fiscal year 2025 by 0.9 percentage points and for the fiscal year 2026 by 1 percentage point. Due to the increasing contribution of overseas business, the effective tax rate will decrease. Therefore, the earnings forecast per share for the fiscal year 2025 has been raised by 7% and for the fiscal year 2026 by 6%. Introducing an earnings forecast of 0.37 Chinese yuan per share for the company in fiscal year 2027.