Group 1 - Citi has adjusted the earnings forecast for Sensible Holdings (01999) for the fiscal years 2026 to 2028, with a 2% decrease for 2026, a 1% increase for 2027, and a 4% increase for 2028 [1] - Following the acquisition of Gainline, Citi raised the target price from HKD 5.3 to HKD 6.5, based on an 11x price-to-earnings ratio for fiscal year 2026, indicating an attractive valuation [1] - The expected return for fiscal year 2027 exceeds 6%, with a projected compound annual growth rate of 7% for earnings per share over three years [1] Group 2 - Sensible Holdings announced a USD 32 million acquisition of 100% of Gainline Recline Intermediate Corp. to strengthen its position in the U.S. sofa market [1] - The company aims to achieve cost synergies through lower supply chain procurement costs, including cheaper metal frame purchases and bulk discounts, with a goal for Gainline to reach breakeven within 12 months [1] - The acquisition is expected to contribute a 1% and 4% profit boost to Sensible Holdings in fiscal years 2027 and 2028, respectively [1] Group 3 - Citi believes that Sensible Holdings holds a dominant position in the leisure sofa market in both the U.S. and China, with structural improvements in living standards in China supporting long-term growth [2] - The company is expected to increase its market share in the U.S. through competitive production facilities in Vietnam [2] - The penetration rate of leisure chairs is projected to rise from 9.7% in 2023 to double digits over the next five years, which is anticipated to benefit the company [2]
花旗：升敏华控股评级至“买入” 目标价上调至6.5港元