Core Viewpoint - UBS maintains a "Buy" rating for Hengan International (01044), raising profit forecasts for 2026 to 2028 by 4% to 9% due to strong performance in the second half of last year and better-than-expected results in high-end products [1] Group 1: Financial Performance - Hengan's revenue for the second half of 2025 is expected to grow by 3.9% to 11 billion RMB, with net profit rising by 31% to 1.1 billion RMB, outperforming both UBS and market expectations [1] - Excluding foreign exchange impacts, net profit is estimated to grow by 21% year-on-year in the second half [1] - The overall gross margin improved by 4 percentage points year-on-year and 3 percentage points quarter-on-quarter to 35.5%, benefiting from lower raw material prices and increased sales of high-margin products [1] Group 2: Business Highlights - Sales of tissue and hygiene products increased by 8% year-on-year in the second half, accelerating from 3% growth in the first half [1] - The management indicated a 5% growth in tissue product sales for 2025, supported by an improved high-end product mix and a 1 percentage point increase in average price [1] - Although sales of hygiene products declined, this was offset by an increase in average prices [1] Group 3: Industry Outlook - The management expects continued intense competition in the hygiene products industry in 2026, planning to shift towards mid-to-high-end products to avoid price wars [2] - While wood pulp prices are expected to stabilize, there are concerns about supply chain uncertainties and raw material price increases due to conflicts in the Middle East [2] - Expansion into international markets and new product categories is anticipated to be the two main drivers of sales growth over the next five years [2] - Major shareholders may continue to increase their holdings, reflecting confidence in the company's prospects [2]
瑞银：维持恒安国际(01044)“买入”评级 升目标价至34.9港元