In the report "Major Banks," China International Capital Corporation raised the target price of H&H International Holdings to 17.7 yuan, with profit levels expected to continue improving

CICC published a report stating that H&H International Holdings (01112.HK) announced its half-year results, with revenue of RMB 7.02 billion, a year-on-year increase of 4.9%; adjusted net profit of RMB 360 million, a year-on-year increase of 4.6%. The results are generally in line with market expectations. All three major segments recorded positive growth, and milk powder revenue has stopped declining and returned to growth. The EBITDA margin remains in a healthy range, and the adjusted net profit margin has improved.

The report indicates that the company's full-year revenue is expected to achieve high single-digit growth year-on-year, and organic profits are likely to continue improving. Considering the recovery of the milk powder business, the earnings forecasts for 2025/2026 have been raised by 5%/6% to RMB 640 million/RMB 760 million. The company's current valuation is 14/11 times the 2025/2026 price-to-earnings ratio. Considering the market valuation increase, the target price has been raised by 23% to HKD 17.7, corresponding to 16/14 times the 2025/2026 price-to-earnings ratio, maintaining an "outperform the industry" rating