Huatai Securities said that as competition in the industry becomes more rational, the overall price of infant formula is expected to stabilize, giving Feihe a buying rating, with a target price of HK$5.09.
The Zhitong Finance App learned that Huatai Securities released a report saying that China's Feihe (06186) dividend ratio in 2023 was as high as 70%, which is a clear boost compared to the same period last year. As competition in the industry becomes more rational, the overall price of infant formula is expected to stabilize, giving Feihe a buying rating. The target price is HK$5.09.
According to the report, overall demand in the infant formula industry was weak in 2023. After the introduction of the new national standard, promotion and inventory removal of small and medium-sized brands put pressure on the industry price market. As a leading enterprise in the infant formula industry, China Feihe is highly resilient. Furthermore, it is expected to enjoy the dividends of increased concentration as industry competition slows down and prices rise steadily in 2024. Furthermore, the company's inventory clean-up has basically come to an end, and Feihe is expected to go to battle lightly in 2024 and take the lead in bottoming up.