[ET Net News Agency, 13 November 2020] Daiwa Research lowered its target price for
Ausnutria Dairy (01717) to HK$15.3 from HK$18.4 and reaffirmed its "buy" rating.
The research house cited management during the post-3Q results analyst call saying that
it (1) they target 20% revenue growth for 2020, with 25% growth for the cow infant formula
(IMF) segment and goat IMF sales to remain under pressure in 4Q, (2) they aim for a flat
selling cost ratio in 2020, (3) they see goat IMF sales improving in 2021 on a normalised
channel inventory and new SKU launches, and (4) they sees revenue of the cow IMF business
unit Hyproca rising by 65% in 3Q, led by a slight GPM expansion for the segment.
Daiwa expects the GPM (gross profit margin) decline of goat milk-related commodities to
narrow in 4Q as European markets recover gradually from the COVID-19 impact. It lowered
its 2020-22 EPS forecasts by 6-15% on a lower GPM outlook for the goat business. (KL)