Glonghui, April 2 | J.P. Morgan Chase released a report saying that Master Kong's sales increased by 2.2% last year, while profit rose 18.4%. Both fell short of market expectations, mainly due to the slowdown in beverage sales, and its EBIT fell 45% year-on-year in the second half of the year. It was a surprise that the EBIT of instant noodles increased by 52% year-on-year in the second half of the year. As the promotion strategy did not work as well as ideal, investment costs turned up moderately, and the company plans to reduce promotion and re-invest in new products. The company aims to increase sales by medium to high units this year and increase net profit margin. The bank expects the company's sales and profit to increase by 6% and 14% respectively this year, and plans to maintain a long-term dividend payout ratio of 100%. The current price is equivalent to 12 times the projected price-earnings ratio and 7% dividend rate this year. It believes the stock is a high-return defensive choice and maintains an “overholding” rating. The target price was lowered from HK$15.1 to HK$13.5.