[ET Net News Agency, 10 November 2017] HSBC Global Research raised its target price for
Hengan International (01044) to HK$58.8 from HK$50, and maintained its "buy" rating.
The research house has conducted on 1,141 female respondents on their preference of
sanitary napkin brands and the factors that influence their choices.
It said sanitary napkins are Hengan's most important profit driver (64% of its operating
profit in 2017). The survey shows Hengan as the leading in brand among young and single
women. For wealthier and married consumers, "new products" and "product experiences" were
dominant factors behind choosing brands.
HSBC said the survey also reveals the rising influence of digital marketing/social
circles (i.e., friends and family) over traditional marketing/store display on brand
decisions, especially among younger consumers. This trend could level the playing field
for foreign brands which are weak in distribution but strong in products, posing a threat
to Hengan.
HSBC revised up its 2018/19 net profit estimates by 6%/12%, and forecast net profit CAGR
over 2017-19 of 7% on 7% revenue growth. (KL)