[ET Net News Agency, 22 August 2019] Daiwa Research raised its target price for Yihai
International (01579) to HK$46.7 from HK$43.3 but downgraded its rating to "hold" from
"outperform" as its share price has risen 147% year-to-date.
The research house said Yihai reported in-line interim results. However, operating
margin decreased from increased spending to support new product launches and pre-opening
expenses for its new Bazhou factory.
Daiwa expects gross margin pressure in 2H from its new plant to be offset by a favorable
sales mix. It raised its 2019 net profit by 2% on the faster growth in third-party sales
and scale achieved in convenient ready-to-eat products in 1H. (KL)