Daiwa raised its investment rating for TINGYI to "Outperform" with a target price increased to 13 yuan

Daiwa published a report stating that Tingyi (00322.HK) management reiterated yesterday (13th) that last year's core profit guidance was an annual growth of over 10%, indicating that although revenue may decline, benefiting from favorable raw material prices, core profit in the second half of last year will still grow by over 8% year-on-year.

The firm predicts that the company's revenue in the second half of last year decreased by 2.2% year-on-year, with the noodle business growing by 2.4% year-on-year, carbonated beverages (Pepsi) growing by 2.6% year-on-year, while non-carbonated beverages decreased by 8.7% year-on-year. The firm expects that carbonated beverages and the noodle business will maintain growth this year, and the new CEO plans to prioritize revenue growth in ready-to-drink tea and juice businesses through channel investments. The firm anticipates that Tingyi will maintain a stable market share in the tea and juice market this year, and compared to its closest competitor, Uni-President China (00220.HK), which faces more competitive pressure from freshly prepared beverages, the outlook is more optimistic.

The firm upgraded its investment rating for Tingyi from "Underperform" to "Outperform," raising the target price from 11 HKD to 13 HKD