Jinwu Financial News | Anxin International Development Research Report says that Erie's entry into Ausu (01717) will bring comprehensive management reforms to Ausu. There is room for improvement in cost reduction and efficiency, and there is plenty of room for collaboration in the supply chain.
The bank expects Australia's performance to be under pressure in the second half of '23, but it will improve in '24. On the one hand, competition in the industry continued to intensify in the second half of the year, and the milk powder and goat milk powder businesses were still challenged. On the other hand, the company will also depreciate its inventory, putting pressure on gross margins. The positive factors are the easing of the industry and the cost reduction and efficiency brought about by the company's own management reforms. Furthermore, the goat milk powder Jiabeite has been approved by the US FDA and can enter the US market.
Considering 23 years of competitive pressure, the bank lowered net profit for 23/24/25 to RMB 1.8/310 million, respectively, and the corresponding EPS was HK$0.12/0.18/0.2. Maintaining the “Overweight” rating, the target price was lowered to HK$2.8.