Glonghui, November 17 | According to a research report published by Bank of America Securities, Minhua's adjusted profit for the first half of the 2024 fiscal year increased by 9.7% year-on-year, about 10% higher than the bank's forecast, mainly driven by a 1.3 percentage point increase in gross margin of the Chinese business. However, during the period, Chinese consumers were more likely to buy cost-effective products, increasing the contribution of low-priced products, dragging down the average product price by about 18%. However, considering that logistics and transportation costs are falling faster than expected, Bank of America raised its profit margin expectations. Based on the lower valuation level and reaffirming the “buy” rating, the net profit forecast for the 2024-2025 fiscal year was lowered by 0% to 5%, and the target price dropped from HK$7.5 to HK$7.2.