[ET Net News Agency, 11 September 2019] Citi Research lifted its target price for Man
Wah Holdings (01999) to HK$6.2 from HK$4.8 and maintained its "buy" rating.
The research house raised its earnings estimates by 1-6% in FY2021-22 based on (1) the
rise of utilization rate in China factory on sustained growth of China market from current
trough at 40-50%, (2) US revenue growth to accelerate from FY2021 on faster share win on
the back of Man Wah's greater presence in Vietnam while most smaller peers are still based
in China, and (3) margin in Vietnam plant to improve from FY2021 on efficiency gain after
the first year of ramp-up since end-FY2020.
Management guided capex will fall to HK$0.8-1.0bn in FY2020 and further slip to HK$500m
pa in FY2021-22 from the peak HK$3.2bn in FY2019. Citi thinks that management will either
pay down the debt to save the finance cost or increase dividend payout or both. Hence, it
thinks the dividend payout ratio will surge in the coming years. (KL)
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01999 MAN WAH HLDGS
Nominal 
4.390 +0.030 (+0.688%) Others
11/09/2019 09:51
{I-bank focus}Citi lifts Man Wah Holdings (01999) to HK$6.2
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