[ET Net News Agency, 8 August 2019] Jefferies Research raised its target price for
Uni-President China (UPC)(00220) to HK$9.5 from HK$6.8 and upgraded its rating to "hold"
from "underperform".
The research house said UPC reported mixed 1H results with revenue miss and profit beat.
The robust bottom-line was boosted by wider gross margin expansion. Coupled with
continuing gross margin expansion into 2H, Jefferies raised its 2019-20 earnings forecasts
by 33%/22% on margin upgrade.
During the conference call, management said it has no intention to compete on pricing
promotion despite revenue pressure. It will continue to focus on product premiumization
and brand building. Management expects 2H gross margin to continue to benefit from
favorable commodity costs and lower VAT. (KL)