[ET Net News Agency, 7 May 2021] Morgan Stanley lowered its target price for Hengan
International (01044) to HK$57 from HK$73 and downgraded its rating to "equal-weight" from
"overweight".
The research house said Hengan's business reforms during 2015-17 yielded 10-13% sales
growth for 2018-19, higher than the 3-6% level of 2015-17. However, likely because of a
slower push in e-commerce and new product rollout, it recorded 1% sales decline in 2020,
underperforming peers.
Hengan is working on new initiatives to better operate in e-commerce and with new
products. The market's expectations are low, given Hengan's trough valuation, but Morgan
thinks it could take a few more years for the company to conduct a thorough corporate
adjustment. (KL)