Morgan Stanley lowers the target price for CHINA FEIHE to 6 yuan, rating "Overweight"

AASTOCKS
2025.07.08 03:15

JP Morgan published a research report indicating that CHINA FEIHE (06186.HK) experienced a decline in stock price after issuing a profit warning. The bank believes that the company's fundamentals remain strong, and the previous stock price was an excessive correction. The company's channel inventory level has now dropped to 0.5 months, indicating a sales rebound in the second half of the year.

Morgan Stanley expects that CHINA FEIHE's sales and profit growth rates for the second half of the year will be 10% and 18% year-on-year, respectively, with an expected annual sales growth of 0.5% for the full year. Adjusted profits are expected to decline by 14.6%, and the bank anticipates a compound annual growth rate for sales and profits of 3.8% and 13.1%, respectively, from 2025 to 2027. The bank has lowered the company's target price from HKD 7.1 to HKD 6, maintaining a "buy" rating to reflect the recovery of the infant formula (IMF) business

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