Investment Rating - The report maintains a "Buy" rating for China Feihe (6186 HK) with a target price of HKD 7.40 [7][8]. Core Views - The implementation of fertility stimulus policies is expected to enhance the birth rate and benefit leading infant formula companies like China Feihe [1][2]. - The infant formula industry is experiencing a rationalization of competition, with overall pricing stabilizing, which is expected to support revenue growth for the company [2][3]. - The company is anticipated to benefit from improved operational efficiency and reduced costs, leading to an increase in profit margins [3][4]. Summary by Sections Investment Rating - The investment rating for China Feihe is "Buy" with a target price set at HKD 7.40, reflecting an upward adjustment from a previous target of HKD 4.49 [4][7]. Market and Policy Environment - Recent government policies aimed at boosting birth rates include direct financial support for families, which is expected to positively impact the demand for infant formula [1][2]. - The number of newborns in China is projected to increase by 52,000 (+5.8%) in 2024, reaching 9.54 million [2]. Financial Performance and Projections - Revenue for 2024 is expected to reach RMB 20.84 billion, marking a 6.68% increase from the previous year, with net profit projected at RMB 3.83 billion [6][17]. - The company’s EPS is forecasted to grow from RMB 0.37 in 2023 to RMB 0.42 in 2024, and further to RMB 0.50 by 2026 [4][17]. - The report highlights a projected reduction in the company's expense ratio, which is expected to enhance profit margins [3][4]. Competitive Position - As a leading player in the infant formula market, China Feihe is well-positioned to capitalize on the recovery in industry demand and the consolidation of market share [3][4]. - The company has implemented digital management strategies to optimize inventory and pricing, which are expected to contribute to revenue growth in 2024 [3].
中国飞鹤：生育政策加码，婴配粉龙头有望迎来利好-20250314