Hengan International 1044

Re: Hengan International 1044

Postby winston » Fri Feb 19, 2010 2:35 pm

PE 44; EPS growth 25% ? Not vested

DJ MARKET TALK: Still "Years Of High Growth" For Hengan - GC

1219 [Dow Jones] STOCK CALL: GuocoCapital keeps Hengan International (1044.HK) at Buy, target price of HK$62.39 based on 30X FY10 P/E; notes Hengan shares recently corrected from all-time high of HK$60.00 hit Dec. 1, offers buy chance for long-term investors.

Believes release of FY09 results will be re-rating catalyst, due to sequential sales, gross margin improvement in 2H09, which driven by better economy, new product launch, product mix upgrading.

Tips still "years of high growth" ahead, especially in rural areas where disposable income rose faster, disposable paper penetration rate much lower, with company dominating mid/low-end disposable paper market, has extensive distribution channel to cover such areas.

As 60%-70% of Hengan's revenue comes from non 1st-tier cities, "we believe the company will be a key beneficiary from favorable government policies on rural development." Stock +0.5% at HK$51.25; HSI down 2.3%.

Source: Dow Jones Newswire
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Re: Hengan International 1044

Postby winston » Thu Mar 04, 2010 9:57 am

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DJ MARKET TALK:Hengan's Fundamentals Strong But Valuation Fair-CS

0908 [Dow Jones] STOCK CALL: Credit Suisse starts Hengan International (1044.HK) at Neutral with DCF-based target price of HK$59.80, implying 29.5X FY10 P/E, 1X 3-year PEG. Says sitting on 6-month inventory of low-price pulp (sufficient for tissue paper production till June-end), Hengan's gross margin in 1H10 locked; expects sanitary and diapers to fuel future growth, benefiting from rural consumption upgrade.

House thinks Hengan deserves core-holding in China consumer portfolio, for brand strength, strategic positioning in rural areas, extensive distribution network, proven execution skills, but due to fair valuation, "we would wait for a better entry point." Stock flat at HK$53.05 yesterday.

Source: Dow Jones Newswire
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Re: Hengan International 1044

Postby winston » Thu Mar 25, 2010 3:12 pm

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DJ MARKET TALK: Hengan +2.9% But S/T Upside Likely Capped

1444 [Dow Jones] Hengan International (1044.HK) +2.9% at HK$56.75 vs HK$56.00 midday, after posting FY09 net profit +58% on-year to HK$2.12 billion, tad above HK$2.03 billion pegged by 15 analysts surveyed by Thomson Reuters.

Like many leading China branded consumer plays like Li Ning (2331.HK), Tsingtao Brewery (0168.HK) etc. Hengan's execution in recent years almost impeccable, problem is share also being priced for perfection; latest results lower Hangan's historic P/E to 32X, still lofty, especially given FY09 results being helped by low-cost inventory (wood pulp), resulting in gross margin expanding to 46% vs 40% year ago, such hefty margin may not sustain this year.

Hengan's 52-week high is HK$60.05 hit Dec. 1, could be a while before stock revisit this level. Volume modest at HK$71.2 million.

Source: Dow Jones Newswire
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Re: Hengan International 1044

Postby winston » Tue May 25, 2010 6:47 am

Hengan plans clean break from rivals as costs rise

Tuesday, May 25, 2010

Personal hygiene products maker Hengan International (1044) says raw materials are costing much more, but it has no plans to raise prices.

"We purchased plenty of wood pulp, a major raw material for our products, when the prices were low," said deputy chairman and chief executive Hui Lin-chit.

"The wood pulp reserves should be enough to last until the end of September."

Hui said the price advantage should help Hengan gain a bigger market share as some of its rivals have raised their selling prices by 5 to 10 percent under pressure from higher costs.

He said the mainland firm will not increase its wood pulp stocks if prices keep rising.

Hui said the company does not have plans to spin off its food and snack business for now, and is looking to expand in this sector.

Revenues from food and snack products last year was HK$866.72 million, 8 percent of Hengan's total. Hygiene products accounted for 84.5 percent of revenues, which hit HK$9.16 billion.

Hui also said that a subscription for shares of Youyuan International shares was a personal investment decision made by his son and has nothing to do with Hengan. He said HK$120 million worth of shares was subscribed in the name of SD Family Fund as a corporate investor.

The shares of the Fujian-based tissue maker have a six-month lock-up period.

Youyuan is expected to make its trading debut on Thursday.

Hengan is currently in talks on potential acquisitions, Hui said, without disclosing details.

Shares of Hengan fell 1.88 percent to close at HK$52.30. SOPHIE HE

http://www.thestandard.com.hk/news_deta ... 00525&fc=2
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Re: Hengan International 1044

Postby winston » Tue Jan 04, 2011 5:52 am

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Hengan International (1044) - known as China's Procter & Gamble - has been a star performer for years and looks likely to stay that way.

The firm makes, distributes and sells personal hygiene items including sanitary napkins, disposable diapers, tissue paper and skin-care products.

Its net profit surged from HK$450 million in 2005 to HK$2.12 billion in 2009. For the six months ended June 2010, net profit was HK$1.2 billion. So full-year earnings should reach another record high.

Almost half its revenue comes from tissue paper sales. Sanitary napkins and disposable diapers account for 22.5 percent and 17.7 percent of total revenue, respectively.

Costlier wood pulp and petrochemicals raised production costs but Hengan found no difficulty in raising prices and moving to higher-end products to maintain earnings growth. The company is expanding production capacity to cope with rising demand.

Hengan's share price rose more than 15 times from around HK$5 in early 2005 to a record high of HK$79 in September. Dr Check recommended this stock four times. It closed at HK$67.55 yesterday and is worth buying near HK$66.


http://www.thestandard.com.hk/news_deta ... 10104&fc=2
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Re: Hengan International 1044

Postby winston » Tue Mar 29, 2011 12:35 pm

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PE 34
Revenue +24%
EPS Growth +12.6%

http://www.hkexnews.hk/listedco/listcon ... 329200.pdf
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Re: Hengan International 1044

Postby winston » Thu Apr 14, 2011 7:43 am

Hygiene giant Hengan looks set for further growth

The valuation of Hong Kong shares is now attractive - at 13 times forward earnings. Dr Check thinks we are still having a healthy correction, with firm support for the Hang Seng Index seen around 23,600. So our downside should be limited.

But it is ever more important to choose the correct stock. Hengan International (1044) - known as China's Procter & Gamble - has been a star for years and the trend shows no sign of changing.

Hengan makes and sells personal hygiene items including sanitary napkins, disposable diapers, tissue paper and skin- care products. From fiscal year 2005 to 2010, Hengan's net profit grew from HK$450 million to HK$2.44 billion. About 45 percent of its revenue came from the sale of tissue paper.

Rising wood pulp and petrochemical prices have lifted production costs but Hengan had no difficulty raising prices and moving to higher-end products to keep earnings growth. The company is expanding production capacity to meet increasing demand.

The stock rose more than 15 times from around HK$5 in early 2005 to a record high of HK$79 last September. Investment banks gave it a target price from HK$58 to HK$68.

I still think the company has room to continue growing strongly. Below HK$62, the stock is worth picking up


http://thestandard.com.hk/news_detail.a ... 10414&fc=7
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Re: Hengan International 1044

Postby winston » Wed Aug 31, 2011 6:57 am

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Separately, personal hygiene products maker Hengan International (1044) saw its interim net profit drop by 1.7 percent to HK$1.18 billion, or 96.6 HK cents per share, from a year ago, due to cost pressures.

An interim dividend of 60 HK cents was declared.

Rising material costs dragged gross profit margin down by 6.9 percent to 38.6 percent.

"Cost of raw materials has dropped 10 percentage points, but we believe the margin could rise back to 40 percent by December," said CEO Hui Lin-chit. Hengan shares rose 1.75 percent to HK$63.9 yesterday.


Source: The Standard HK
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Re: Hengan International 1044

Postby winston » Wed Aug 31, 2011 2:18 pm

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DJ MARKET TALK: CS Upgrades Hengan To Outperform From Neutral

1338 [Dow Jones] Credit Suisse upgrades Hengan (1044.HK) to Outperform from Neutral, on the back of easing input cost pressure and accelerating baby diaper sales on product launch and channel expansion.

"Compared with other consumer staple companies, Hengan's input cost is easing and margin expansion is more visible."

It says Hengan's August input cost has already been 13%-20% lower than the peak in 1H11 and 8%-10% lower than 1H11 average.

The house raises its target to HK$73.50 from HK$63.00, implying a 23.4X 2012 P/E and matches a 26% earnings CAGR for FY10-FY13.

It revises up its earnings forecasts by 2%-5% to reflect higher sales momentum. The stock is up 3.6% at HK$66.20 at midday.

Source: Dow Jones Newswire
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Re: Hengan International 1044

Postby winston » Fri Sep 23, 2011 11:56 am

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DJ MARKET TALK: Hengan Off 0.5%; Defensive In Economic Downcycle-CS

1140 [Dow Jones] Hengan (1044.HK) extends its recent outperformance, it is down 0.5% at HK$64.60 vs the HSI's 2.1% fall, thanks to its defensive status as a China-based personal hygiene products producer.

The stock fell only 2.3% month-to-Thursday, vs the HSI's 12.8% loss during the same period. "Hengan is our top pick in the China consumer universe.

We believe it is a typical defensive play in an economy downcycle, given its resilient sales growth and margin expansion potential," says Credit Suisse.

It notes Hengan's share price outperformed the HSCEI by HSCEI22% in 2008, 69% in 2009, 17% in 2010, 24% so far in 2011 and 14% since Aug. 31.

It keeps the stock at Outperform, with a target of HK$73.50.

Source: Dow Jones Newswire
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