UBS lowers Want Want's target price to 5.8 Hong Kong dollars, and the mid-term performance is below expectations.

On November 26th, Jinshi Data reported that UBS released a report stating that Want Want (00151.HK) performed worse than expected in the mid-term, lowering the target price from HKD 6.5 to HKD 5.8, while maintaining a buy rating. The report stated that Want Want's mid-term sales fell by 3.5% year-on-year, net profit rose by 7.6% year-on-year, gross profit margin rose by 2.1% year-on-year to 47.3%, and net profit margin rose by 1.7% year-on-year to 17.1%. The bank believes that the income and net profit figures are slightly lower than market expectations, reflecting challenges in demand. The company announced that it will not distribute interim dividends, the same as the same period last year. UBS has lowered its net profit forecast for Want Want's fiscal year 2025 and 2026 by 8% and 7% respectively, to reflect the challenges in sales and profit margins. The new forecast means that sales and net profit for fiscal year 2025 will remain flat year-on-year, while sales and net profit for the second half of fiscal year 2025 will increase by 3% and fall by 6% year-on-year respectively.