Bank of America Securities reiterates WANT WANT's "Underperform" rating, as channel and product expansion may pressure profit margins

Bank of America Securities published a research report indicating that Want Want (00151.HK) reported a year-on-year revenue growth of 2.1% for the interim period ending September 2026, in line with expectations, but net profit fell by 7.8% year-on-year, which was below expectations, primarily due to a decline in gross margin and an increase in sales and management expenses.

The firm reiterated its "underperform" rating on Want Want, believing that while expanding into emerging and snack discount channels can drive sales and penetration growth, it may also weaken product pricing power and increase channel costs, putting pressure on long-term profit margins. Additionally, there are concerns about weak demand in the dairy beverage category and competition from e-commerce platform subsidies. Accordingly, Bank of America Securities has lowered its earnings per share forecast for Want Want for the fiscal years 2026 and 2027 by 8% to 10%, and reduced the target price from HKD 5 to HKD 4.7