Guotai Haitong: Initiates "buy" rating on BEST PACIFIC (02111) with a target price of HK$4.42.

Guotai Haitong released a research report stating that it is optimistic about BEST PACIFIC (02111) leveraging its years of experience in the elastic fabric field, deepening cooperation with well-known domestic and international sports and outdoor brands, and obtaining more orders in the adjustment of the textile and garment manufacturing trade landscape with its mature overseas production capacity. The bank predicts that the company's net profit attributable to shareholders for the years 2025-2027 will be 590 million, 640 million, and 700 million Hong Kong dollars respectively. Using a comprehensive valuation approach combining PE and PB methods, the average target price is set at 4.42 Hong Kong dollars per share, initiating coverage for the first time with a rating of "hold". In terms of future prospects, 1) it is a high-quality target with low valuation and high dividend yield: the company places a high importance on shareholder returns, with uninterrupted dividends every year since its listing, and a stable dividend payout ratio of 50% in recent years, with a dividend yield of more than 9% for four consecutive years. 2) Overseas production capacity to capture more orders: the bank believes that the company, with its mature production capacity in Vietnam, Sri Lanka, and other locations, is expected to benefit from the adjustment of production capacity layout under the equivalent tariff structure and capture more brand order transfers. 3) High-quality customer base: the company's cooperation with well-known sports and outdoor brands has been for over 5 years, and with deepening cooperation, future orders are expected to be secure.