[ET Net News Agency, 15 June 2018] Goldman Sachs raised its target price for Want Want
China Holdings (00151) to HK$6.5 from HK$5.6 on higher earnings forecasts for 2019-2021,
and maintained its "sell" rating.
The research house said Want Want shares now trade on 23x 12-month forward PE, similar
to peers. Goldman revised up its 2019-2021 EPS forecasts by 9-10% to account for higher
near-term sales and moderately improving margins.
Goldman said the "sell" rating was based on: (1) a sales recovery mainly from network
expansion rather than market share gains, (2) a lack of meaningful new product
contributions to drive longer term sales growth, and (3) ASP hikes that may upset volume
growth especially in dairy beverage segment. (KL)