BoCom International reported that net profit in the first half of fiscal year 2013 is expected to grow by 21 per cent year-on-year, driven by a 30 per cent increase in revenue due to expansion of points of sale and a good product mix (the results will be announced on the 25th of this month). Based on the steady increase in market share and the prospect of becoming an ideal acquisition target for multinational skincare companies trying to infiltrate the Chinese mass market, BoCom raised its target price-to-earnings ratio from 12 to 15 (in line with its historical average expected earnings ratio and 16% discount to the median price-to-earnings ratio of China's fast-moving consumer goods industry). Raise the target price of the stock from 3.5 yuan to 3.8 yuan. BoCom reiterated its "long-term buy" rating and advised investors to wait for a chance to buy after the market adjusts its earnings forecast (due to increased investment in advertising).

BoCom also raised distribution costs as a percentage of sales by 2-3 percentage points to 55 per cent in the 2013-15 fiscal year, in view of increased brand investment to consolidate its leading position in the Chinese Volkswagen mask market.

BoCom believes that Midea's efforts to step up marketing will help the company withstand increasing competitive pressure due to increased competitors and help it accelerate its capture of market share in the booming Chinese mask market.