UBS Group released a report pointing out that Wangwang (00151.HK) had year-on-year revenue and net profit growth of 2.9% and 18.4%, respectively, up to RMB23.6 billion and RMB3.9 billion, as of the end of the fiscal year in March. This means that revenue and net profit for the second half of the fiscal year will grow year-on-year by 1.8% and 27.2%, respectively. Due to the improved gross margin, net profit exceeded the bank's and the market's expectations. The company declared a final dividend of RMB2.787 billion, meaning that the annual dividend payout ratio returned to 70%, in line with the bank's expectations. Including share buybacks, the dividend payout ratio reached 77%. The bank believes that the company's declaration of a final dividend can alleviate investors' concerns about the management's future shareholder return attitude.

The bank reiterated its "buy" rating on Wangwang and raised its net profit forecast for 2025 and 2026 by 3% and 1%, respectively, expecting the average annual compound growth rates of revenue and net profit from 2024 to 2026 to be 3% and 6%. The bank believes that the Wangwang stock price is attractive, with the current price equivalent to a forecasted P/E ratio of 11 times for the fiscal year 2025 and a dividend yield expected to reach 6.7% and 6.9% for fiscal years 2025 and 2026, respectively. The target price is HKD6.5.