[ET Net News Agency, 21 October 2020] DBS Group Research raised its target price for
Hengan International (01044) to HK$77.2 from HK$76.51 and maintained its "buy" rating.
The research house said Hengan's e-commerce sales accounted for only 18% of its overall
sales as of June 2020, indicating great growth potential compared to close peers.
In addition, high-end sanitary napkins take up only a mid-single-digit rate of its
segmental sales, which should see double-digit growth year-to-date. It targets to achieve
20% segmental sales in the longer term.
DBS expects Hengan's ROE to climb from 21% in FY2019 to 26% in FY2021, underpinned by
improving sales performance, high gross margin and better cost control. It raised its
2020/21/22 earnings forecasts by 2.9%/0.5%/0.2% on better opex control. (KL)