Goldman Sachs released a research report stating that it maintained the “buy” rating of Changhe (00001), adjusted the 2024-2026 earnings forecast by 3%-10%, and raised the target price by 4% to HK$56 from HK$54.
The bank pointed out that there were too many unexpected expectations for the long term and results in 2023, and overall net profit also declined, which may be due to a lack of one-time income. The company's revenue rose 1% year on year and EBITDA fell 1% year on year due to Watsons's strong retail performance and increased financing and investment contributions. Among them, the European telecommunications business and port business EBITDA both declined.
According to the report, Changhe's net profit last year was in line with Goldman Sachs's expectations, down 36% year on year. After deducting the annual revenue of HK$11 billion from European telecom tower sales and the merger of Indonesia's Indosat, etc., the Group's basic profit fell 9% year-on-year, mainly driven by rising financial expenses. Goldman Sachs also indicated that Changhe's final dividend of 2023 was HK$1.78, and the annual dividend was HK$2.53, a year-on-year decrease of 13%, which meant that the payout ratio was 42%, up from 31% in 2022.