[ET Net News Agency, 5 November 2019] Goldman Sachs lowered its target price for Health
& Happiness (H&H) International Holdings (01112) to HK$43.1 from HK$44.2 and maintained
its "buy" rating.
The research house said H&H management during the call noted its expectation of a
moderate sales recovery into 4Q given the rebound in the IMF (infant milk formula)
business and a smaller decline of Swisse's Australia daigou business.
Goldman thinks the company's continued investment in branding may bring near term margin
pressure, but the daigou disruption for Swisse's business is likely to be short term and
expects a solid rebound from 2020. The company's continued new product launches and
multi-brands should contribute more meaningfully for the next 2 years.
Goldman revised its 2019-2021 recurring EPS forecasts by 0-1% mainly to factor in
slightly higher sales growth from the baby nutrition business and lower margin in the
adult nutrition business. (KL)