Gelonghui, December 4 | According to a research report published by UBS, Minhua's current price reflects to a large extent that investors look down on its fundamentals. Based on weak demand and declining alpha coefficient (alpha), domestic business is conservative, and expected consumption downgrade and market competition will put pressure on profit margins. As for the export business, which is relatively positive, I believe the next few quarters will continue to benefit from the return of orders and the resolution of downstream inventory issues. The bank expects that the company's earnings per share for fiscal years 2024 and FY25 are HK$0.58 and HK$0.53 respectively. The target price was lowered from HK$9.2 to HK$6.3, maintaining the “buy” rating, believing that the adverse factors may have been absorbed. The bank believes that apart from the slowdown in the property market, the potential for market share growth is not as attractive as it was three years ago. After active expansion from 2020 to 21, it is estimated that the market share of the Chinese sofa market was about 15% last year. However, given the nature of the industry, it is unlikely that the market will be highly integrated. The bank said that although exports are no longer the most important revenue driver, they can still drive up its stock price. Exports are expected to continue to recover in fiscal year 2025, thus offsetting the resistance of domestic business.