[ET Net News Agency, 22 January 2021] Jefferies Research lifted its target price for
Uni-President China (UPC) (00220) to HK$10.55 from HK$8.55 and upgraded its rating to
"buy" from "hold".
The research house said the upgrade was due to (1) channel inventory management being
completed and the next phase is to improve sell-through and increase lower-tier cities
penetration; (2) focus on its better margin core business (70% of sales) which helps
operating leverage, and (3) growth in self-heating products with capacity.
Currently, the stock is trading at 16x 2022 PE and 7x EV/EBITDA with a 100% payout,
Jefferies believes there is upside on the share price. Jefferies expects UPC to report a
20% rise in net profit to RMB1.6bn on a 3% rise in sales to RMB22.8bn in 2020. (KL)