Lyon believes that with the decrease in raw material prices and the improvement of operational efficiency, there is more confidence in the gross profit expansion of Vitasoy Int'l (00345).
According to the channel survey, even in the low base period from January to June this year, Vitasoy's sales in the mainland still lagged behind major competitors. Target price has been lowered from HKD 9.8 to HKD 6.9. Lyon maintains its 'underperform' rating for Vitasoy, and is cautious about the expansion of mainland sales.
The report states that the company's gross profit expansion in the second half of fiscal year 2024 is significant, reflecting its cautious spending, easing the bank's concerns about the potential increase in uncontrollable operating cost ratios. Looking ahead, the bank believes that there is more confidence in the company's gross profit expansion with the decrease in raw material prices and the improvement of operational efficiency.