According to "The Big Bank," Bank of America Securities has lowered the target price for CHINA FEIHE to 4.2 yuan and maintains a "Neutral" rating

Bank of America Securities published a research report indicating that CHINA FEIHE (06186.HK) is expected to see a year-on-year decline in revenue and net profit of 13% and 46% respectively in 2025, with revenue and net profit in the second half of the year expected to drop by 16% and 45%, which is below the bank's expectations, mainly affected by channel destocking and operational deleveraging. The bank has lowered its earnings per share forecast for CHINA FEIHE for 2026 and 2027 by 10% and 13%, respectively, and reduced the target price from HKD 5 to HKD 4.2, maintaining a "Neutral" rating.

The bank stated that the number of newborns in China fell by 17% year-on-year to 7.92 million last year, and it is expected to stabilize slightly this year due to a recovery in marriage registrations and cultural factors, but the increase will be limited. It is anticipated that the demand for infant formula will remain under pressure, with intense competition continuing in the short to medium term. The company's channel adjustments are expected to be largely completed, but the benefits of the subsidy program may need to be gradually realized. Digital initiatives should help strengthen inventory discipline and retail price control, partially offsetting insufficient operational efficiency, but the company may need to maintain a higher promotional intensity to defend its market share, especially as online channels continue to lag behind peers