Jinwu Financial News | According to Anxin International Development Research Report, China's Feihe (06186)'s revenue in 2023 was 19.5 billion yuan, down 8.3% year on year, and net profit was 3.29 billion yuan, down 33% year on year, mainly due to increased competition in the industry, putting pressure on performance. The gross profit margin was 64.8%, down 0.7 pct year over year. The share of sales expenses and management expenses continued to rise, and the company increased its investment to meet industry challenges. The population born in '24 is expected to recover, and the worst period in the industry is about to pass.
Considering increased competition in the industry, the bank lowered its net profit for 24/25/26 to RMB 35.5/37.1/3.89 billion, corresponding EPS of HK$0.43/0.45/0.47. Maintain a “buy” rating. Taking into account market sentiment and valuation, the bank lowered the target price to HK$4.9, which has room for 33% increase compared to the current stock price.