Citigroup raises HENGAN INT'L target price to 27 yuan, rating "Neutral"

Citi's research report indicates that it has raised the net profit forecasts for HENGAN INT'L (01044.HK) for the years 2025 to 2027 by 12.1%, 18.8%, and 19.7%, respectively, mainly due to a downward adjustment in the forecast of the proportion of sales, management, and administrative expenses to sales. This reflects key points derived from Citi's recent meetings in China, including the expectation that the company will recover from a low base in the second half of this year, with a stable outlook for 2026.

Due to the valuation benchmark rolling from 2025 to 2026, Citi has raised the company's target price from HKD 23.1 to HKD 27 based on a sum-of-the-parts valuation method, implying that its forward price-to-earnings ratio remains unchanged at 11 times for the next year. It also believes that HENGAN INT'L remains a yield-oriented company (yielding 5.4%) without significant structural improvements, maintaining a "Neutral" rating