CICC: Raises YIHAI INTL target price to HKD 18, mid-term performance meets expectations

CICC released a research report stating that YIHAI INTL's revenue in the first half of the year increased by 0.02% year-on-year, with net profit rising by 0.4% year-on-year, and a dividend payout ratio of 89%, overall performance in line with expectations. During the period, the B-end catering clients performed impressively, with revenue increasing by 131.7% year-on-year, and overseas business growing by 34%, among which the bank expects overseas third-party business to increase by over 50%. The bank raised the group's earnings forecast for this year by 3% to RMB 820 million and increased the target price by 20% to HKD 18, maintaining an "outperform industry" rating. The bank anticipates that YIHAI INTL's third-party revenue will accelerate in the second half of the year, potentially achieving a double-digit growth target for the entire year. The bank pointed out that the company mainly benefits from the continued strong performance of B-end and overseas businesses, as well as the ongoing contribution of new products to overall revenue. The B-end base material team was established in the second quarter of this year, and a more significant contribution is expected in the second half of the year. At the same time, considering that raw material prices remain stable and sales, general, and administrative expenses continue to improve, it is expected that the annual net profit margin will also remain stable