not vested
First Sales, Then Profit Recovery
Better sales; margins to recover next
Maintain BUY with a new TP, now pegged at 24x FY19E P/E, intact at 1SD above its 7-year average. This is a change from our blended FY17-18E P/E when it had a December year-end.
We also introduce new forecasts following the change in its financial year-end to March.
Expect catalysts from a sustained sales and profit recovery on the back of WWC’s Hot-Kid milk sales.
Healthier channel inventory and strengthening market presence should support its sales momentum.
ASP increases of 5-10% were implemented in April/May for its Hot-Kid milk, which together with abating raw materials cost pressure, bode well for margin recovery.
Relaxing birth control in China is expected to enlarge its addressable market in future.
Source: Kim Eng
https://factsetpdf.maybank-ke.com/PDF/9 ... 1e70dc.pdf