Oct 7th, Guolunhui | Daiwa released a report, Want Want China (0151.HK) is expected to improve its gross margin, but there is not much room for the stock price to rise further, downgraded to "hold". The report cited Want Want's management pointing out that summer sales were weaker than the second quarter due to weather impact, weak demand, and inventory destocking in distribution channels. However, the management of Want Want stated that the decline in milk powder prices is bullish for the group, coupled with China's cancellation of tariffs on New Zealand milk powder, it is expected to improve the gross margin. Therefore, Daiwa believes that the gross margin in the first half of the fiscal year 2025 is expected to climb to 47%. Based on the latest business evaluation, Daiwa has lowered the earnings per share of Want Want for the fiscal years 2025 to 2027 by up to 4%, the target price has been raised from 5.6 Hong Kong dollars to 5.9 Hong Kong dollars. However, due to limited room for further increase in stock price, the rating has been downgraded from "buy" to "hold".