BofA Global Research lowered its target price for Vinda International Holdings (03331) to HK$22.3 from HK$31 and Downgraded its rating to "underperform" from "neutral".
The research house said Vinda's 3Q revenue/operating profit was -0.2%/+48%, suggesting a potential miss of its double-digit sales growth target in 2H (BofA now modeled +4% in 2H).
The sequential trend is also a concern as GPM/OPM was -160/-223bp from 1H. The miss in sales and margins was mainly attributable to the intensifying promotions from both leading and smaller/regional players, post the June-18 shopping festival.
BofA expects intensifying competition in 4Q that could put more pressure on Vinda's sales growth and margins. It also highlighted potential downside to GPM from 2021 onward given the gradual recovery of pulp price. Based on soft 3Q results, it cut its 2020/21 earnings forecasts by 5%/9%.
23/10/2020 14:58
{I-bank focus}BofA lowers Vinda Int'l (03331) to HK$22.3
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