Citigroup: Raised target price for HENGAN INT'L (01044) to 27 Hong Kong dollars Rating "Neutral"

Citibank released a research report stating that the net profit forecast for HENGAN INT'L (01044) for the years 2025 to 2027 has been revised upwards by 12.1%, 18.8%, and 19.7%, respectively. This is mainly due to the forecast of sales, management, and administrative expenses as a percentage of sales being revised downwards, reflecting key points drawn from recent Chinese conferences by Citibank. These include expectations that the company will see a recovery in the second half of this year from a low base, and a stable outlook for 2026. As the valuation benchmark transitions from 2025 to 2026, Citibank has raised the company's target price from 23.1 HKD to 27 HKD using a classification and summation valuation method. This implies that the forward price-to-earnings ratio will remain at 11 times over the next year. They also believe that, in the absence of significant structural improvements, Hengan remains a company focused on earnings (with a yield of 5.4%) and maintain a "neutral" rating.