According to a report issued by Lyon, the Frog Prince confirmed that he would terminate the non-core, low-profit household health products business earlier than expected on January 1 next year, believing that the move was in the right direction. Management can now focus on strengthening the children's products division and improving safety levels, and other catalysts include strong performance this fiscal year, making it one of the first choices for listed small stocks tracked by the bank.
The bank believes that the Frog Prince is undervalued because of his short listing time, and the current price corresponds to 8.4 times forecast 2013 earnings, so he reiterates his "buy" rating, giving him a target price of 4 yuan and a target price-to-earnings ratio of 12 times, which is not expensive compared with his peers.