Furui: Lower WANT WANT CHINA (00151) target price to 4.4 Hong Kong dollars and reaffirm "hold" rating.

FuRui released a research report stating that it has lowered the net profit forecast for Want Want China (00151) by 8% to 11%, and has reduced the target price from 5.48 Hong Kong dollars to 4.4 Hong Kong dollars, while reiterating a "hold" rating. The company's sales in the second half of the fiscal year increased by 5.2% year-on-year, but were dragged down by rising raw material costs and increased SG&A expenses, resulting in a 14.3% year-on-year decrease in net profit. During the period, the dividend payout ratio was lowered from 40% in fiscal year 2025 to 30%. The report mentioned that although the industry is expected to face challenges in the first quarter of fiscal year 2027 (April to June this year), Want Want's management expects new channels to continue to be the key growth driver for the company. It is also expected that the low prices of imported full-fat milk powder locked in for the next 6 to 9 months will alleviate cost pressure and support the recovery of gross profit margin in fiscal year 2027.