[ET Net News Agency, 21 June 2019] HSBC Global Research lowered its target price for
Vitasoy International Holdings (00345) to HK$40 from HK$42 and maintained its "hold"
rating.
The research house said Vitasoy's FY2019 net profit of HK$696m was 4% below HSBC's
forecast. On the positive side, revenue growth in the Hong Kong operation has picked up,
reversing the decline seen a year ago; meanwhile, Vitasoy has maintained a dividend payout
ratio of 64%, despite the higher capital expenditure, reflecting its strong capital and
financial management.
Looking ahead, the company stated it is working to sustain the growth rate in the
mainland China operation, but the profit may be impacted due to the "necessary investment
in building brand equity, infrastructure and organisation".
HSBC lowered its net profit forecasts by 7% and 9% in FY2020 and FY2021 to reflect the
lower revenue growth and higher operating cost forecasts. (KL)