Morgan Stanley lowers target price for Hengan International to HK$23, maintains "in-line with market" rating.

Morgan Stanley released a research report saying that HENGAN INT'L (01044) tissue business should still be the main growth driver, benefiting from sales growth and market share increase. However, due to pressure from online and new retail channels on average selling price, revenue growth may remain moderate. The bank lowered the company's target price from HK$24 to HK$23 by 4.2% to reflect reduced government subsidies and tax rebates. Morgan Stanley believes that the stock valuation is not expensive, and with stable cash generation capabilities, dividend yield should provide support for the stock price. However, if revenue growth does not accelerate significantly or there is no clearer evidence that hygiene products can sustain growth, it may be difficult to give a higher valuation multiple. The investment rating "synchronized with the market" is maintained.