Hengan International Unlikely to Post Earnings Turnaround Amid Price Competition -- Market Talk

Dow Jones08-20

0642 GMT - Hengan International's earnings are unlikely to turn around anytime soon amid fierce price competition, Daiwa Capital Markets analysts say in a report, as the brokerage downgrades the stock to hold from outperform. Management noted intensifying price competition since 2Q, which will likely limit further the personal hygiene products manufacturer's revenue growth and margin expansion in 2H, the analysts add. "Management also highlighted rising price competition in sanitary napkins, which is a major risk to Hengan, in our view, given that sanitary napkins contribute [more than] 80% of Hengan's operating profit," they add. Daiwa cut its 2024-2026 earnings forecast by 9% to 14%, given the tough competition in China's tissue industry. The brokerage lowered its target price to HK$25.00 from HK$30.00. Shares are at HK$23.55. (amanda.lee@wsj.com)

(END) Dow Jones Newswires

August 20, 2024 02:42 ET (06:42 GMT)

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Management noted intensifying price competition since 2Q, which will likely limit further the personal hygiene products manufacturer's revenue growth and margin expansion in 2H, the analysts add. \"Management also highlighted rising price competition in sanitary napkins, which is a major risk to Hengan, in our view, given that sanitary napkins contribute [more than] 80% of Hengan's operating profit,\" they add. Daiwa cut its 2024-2026 earnings forecast by 9% to 14%, given the tough competition in China's tissue industry. The brokerage lowered its target price to HK$25.00 from HK$30.00. Shares are at HK$23.55. 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Management noted intensifying price competition since 2Q, which will likely limit further the personal hygiene products manufacturer's revenue growth and margin expansion in 2H, the analysts add. \"Management also highlighted rising price competition in sanitary napkins, which is a major risk to Hengan, in our view, given that sanitary napkins contribute [more than] 80% of Hengan's operating profit,\" they add. Daiwa cut its 2024-2026 earnings forecast by 9% to 14%, given the tough competition in China's tissue industry. The brokerage lowered its target price to HK$25.00 from HK$30.00. Shares are at HK$23.55. 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