The Zhitong Finance App learned that BOC International released a research report stating that it lowered the target price of Hengan International (01044) by 10% from HK$37.6 to HK$33.85. The 2023 results were in line with expectations and maintained a “buy” rating. The bank is optimistic about improving profit margins, but due to the current low contribution of high-end products, increased competition may slow the growth of the tissue business.

The bank expects that Hengan International's core business will show low single-digit growth in 2024, and the tampon business is expected to perform better than the full year of 2023. Although the price of wood pulp has dropped sharply, the intensification of market competition will also put pressure on the average price. Coupled with the high base effect, the company will increase marketing expenses in the first half of this year. It is expected that the paper towel business will achieve low single-digit annual growth in the first half of this year.