The Zhitong Finance App learned that Haitong Securities released a research report stating that Minhua Holdings (01999) was rated “better than the market” and that the net profit for the 2024-26 fiscal year is expected to be HK$23.09/26.25/HK$2,882 million respectively. As a leading enterprise in the furniture field, as a leading enterprise in the furniture field, a comparable company gave a PE valuation of 13-15 times FY2024, corresponding to a reasonable value range of HK$7.65-8.83. FY2023, the company achieved total revenue of HK$17.79 billion, a year-on-year decrease of 18.4%; realized net profit of HK$1.91 billion, a decrease of 14.8% over the previous year; net profit returned to the mother after deduction was 2.12 billion yuan, a decrease of 6.4% year-on-year.

According to the report, Minhua's domestic and foreign sales are under pressure in the short term, and subsequent repairs can be expected.1) Looking at the Chinese market,As of March 31, 2023, there were 6,471 brand specialty stores in China (excluding 1,706 Style, Prini and Suning stores), a net increase of 503 over the previous year.In the opinion of the bank,With the gradual recovery of the offline market from 2023, the company's stores that bucked the trend during the pandemic are expected to unleash growth potential. Combined with the first-mover advantages of traditional e-commerce platforms and live e-commerce, it is expected that through short video promotion, live streaming of private stores, and in-depth cooperation with leading anchors, the continuous strengthening of online brand influence and sales transformation will further promote the booming development of e-commerce business.

2) Looking at overseas markets,The company's performance was mainly affected by low consumer sentiment due to US inflation and weak export orders due to high inventory at the pipeline end. The bank believes that the company is actively allocating overseas production capacity to reduce costs and increase efficiency. By setting up factories in Vietnam to reduce the adverse effects of the US government's higher tariffs on revenue and gross profit, and at the same time lay out a Mexican factory, by forming a double overseas supply plant to reduce export business risks, and shorten delivery distances to reduce shipping risks.