HSBC: Raises target price of China Mengniu Dairy (01610.HK) to HKD 2.28, but still urges "buy" despite lowered profit forecast.

According to the Wisdom Financial APP, DBS published a research report stating that China National Cereals, Oils and Foodstuffs Corporation (COFCO) Health Food Co., Ltd. (01610.HK) turned losses into profits in the first half of the year. However, due to the decrease in pork prices and pressure on the profit margin of the feed business, its performance was below expectations. Despite the weak pork prices, the company will further reduce costs and improve efficiency in the second half of the year to support the expansion of profit margins. Based on the weak pork prices, the bank has lowered its profit forecasts for 2025 and 2026 by 25% and 6% respectively; maintains a "buy" rating due to steady production expansion and improving profit margins each quarter; based on the upward revision of long-term profit margin prospects, the target price has been raised from 1.89 Hong Kong dollars to 2.28 Hong Kong dollars.