[ET Net News Agency, 17 June 2020] Goldman Sachs lifted its target price for Want Want
China (00151) to HK$5.9 from HK$5.7 and maintained its "sell" rating.
The research house said Want Want's FY2020 results were slightly above Goldman's
estimates. For April-May, company sales recorded double-digit growth, generally consistent
with the trend from other food/dairy peers. Goldman attributed to distributors taking more
inventory from leading brands with a good cash conversion rate over smaller brands, as
well as demand recovery.
However, Goldman sees it more of a short-term benefit rather than structural long-term
growth, given the lack of new product contribution and branding investment. As such, it
expects 2021 sales to reach 7% for full-year, slower than the past 2 months' run-rate.
(KL)