Zhi Tong Cai Jing·2025-11-05 09:31Core Viewpoint - Goldman Sachs has issued a "Buy" rating for Master Kong Holdings (00322) with a target price of HKD 12.7, citing strong growth potential driven by pricing strategies, cost advantages, and efficiency improvements [1][2] Group 1: Financial Performance and Projections - Master Kong aims to achieve double-digit year-on-year growth in recurring net profit for the fiscal year 2025, supported by favorable pricing base effects and cost efficiencies [1] - The management has reiterated a focus on improving profit margins while aiming to restore revenue growth and continue efficiency enhancement measures in 2026 [1] - Instant noodle sales have shown a recovery in positive growth since July 2025, with carbonated beverages also maintaining positive growth in the third quarter [1] Group 2: Cost Management and Pricing Strategy - The beverage business has benefited from favorable cost trends, with gross margins and overall profitability improving due to cost advantages [1] - Palm oil costs increased by 10% year-on-year in the third quarter but stabilized in October, easing compared to the first half of the year, which, along with price increases starting in 2024, is expected to drive margin expansion in 2025 [1] - Management indicated that while large-scale promotions were not conducted during peak seasons, they may reconsider pricing strategies for large-pack beverages if sales remain weak in 2026 [2]