Haitong International lowers the target price for CHINA FEIHE to 4.5 yuan, as self-sufficiency in raw materials and diversified layout welcome recovery

The Haitong International research report points out that China Feihe (06186.HK) is expected to achieve total revenue of RMB 18.11 billion in 2025, a year-on-year decrease of 12.7%; net profit attributable to the parent company is expected to be RMB 1.94 billion, a year-on-year decrease of 45.7%, with full-year performance falling below market expectations. Since May last year, the company has actively optimized channel inventory and controlled the pace of shipments. Coupled with factors such as reduced government subsidies and impairment of biological assets, short-term performance is under pressure, while the basic fundamentals are improving after inventory destocking, laying the foundation for profit recovery.

The firm expects the company's revenue for 2026 to 2028 to be RMB 18.73 billion, RMB 19.47 billion, and RMB 20.36 billion, respectively, with net profit attributable to the parent company expected to be RMB 2.41 billion, RMB 2.57 billion, and RMB 2.76 billion, respectively, corresponding to earnings per share of RMB 0.27, RMB 0.28, and RMB 0.30. It assigns a price-to-earnings ratio of 15 times for 2026, with the target price adjusted from HKD 7 to HKD 4.5, considering the gradual recovery of current industry demand and the completion of the company's channel inventory optimization, maintaining an "outperform the market" rating