[ET Net News Agency, 26 June 2018] Citi Research lowered its target price for Man Wah
Holdings (01999) to HK$5.8 from HK$9, and downgraded its rating to "sell" from "buy".
The research house expects Man Wah's share price to fall under pressure, given potential
trade conflicts between US and China, difficult competitive landscape in Europe, and China
slowdown on a high base.
Citi believes Man Wah's US sales have registered mid-single-digit yoy growth. This is
mainly due to lukewarm US furniture recovery, and Man Wah's limited success in raising
product ASP at its OEM customers.
It sees more uncertainties given the latest trade tensions between US and China. Citi
has recently met Man Wah's management in Europe, and believes the company has seen weak
sales performance on market share loss/forex impact. In view of multiple headwinds, it
trimmed its FY2019-21 earnings forecasts by 6-9%. (KL)