Cathay Securities: Initiates coverage on BEST PACIFIC with a "Buy" rating and a target price of HKD 4.42

CITIC Securities released a research report stating that they are optimistic about BEST PACIFIC leveraging its years of experience in the elastic fabric field to deepen cooperation with well-known domestic and international sports and outdoor brand clients, and to secure more orders through its mature overseas production capacity amid adjustments in the textile and apparel manufacturing trade landscape. The firm expects the company's net profit attributable to shareholders for 2025-2027 to be HKD 590 million, HKD 640 million, and HKD 700 million, respectively. Using a combination of PE and PB valuation methods, an average target price of HKD 4.42 per share is set, initiating coverage with a rating of "Buy." Future highlights include: 1) Undervalued, high-dividend quality stocks: The company places great importance on shareholder returns, having maintained annual dividends since its listing, with a recent dividend payout ratio stabilizing at 50% and a continuous dividend yield of over 9% for four years. 2) Increased orders from overseas production capacity: The firm believes that the company is likely to fully benefit from capacity layout adjustments under equivalent tariffs, securing more brand orders due to its mature production capabilities in Vietnam, Sri Lanka, and other locations. 3) High-quality client base: The company has collaborated with well-known sports and outdoor brands for over five years, and with deepening cooperation, future orders are expected to be secure