europeanpokertourvideos| Min Wah Holdings (01999): FY2025 net profit is expected to increase to HK$2.774 billion, and target price is raised to HK$9

News summary

Minhua Holdings received CICC's "Outperform Industry" ratingeuropeanpokertourvideos, FY2025 net profit forecast 27europeanpokertourvideos.74 billion Hong Kong dollars, raising its target price to HK$9. The company's fiscal year 2024 results exceeded expectations, overseas revenue and profitability grew rapidly, and the dividend payout ratio reached 50.7%.

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Min Wah Holdings 'net profit for the fiscal year 2024 exceeded market expectations. CICC is optimistic about its FY2025 profit prospects and raises its target price to HK$9. CICC maintains Min Wah Holdings'(01999)"outperforms the industry" rating and expects its FY2025 net profit to reach 2.774 billion Hong Kong dollars, and raised its FY2026 net profit forecast to HK$3.274 billion. Based on the valuation switch, the target price rose 13% to HK$9. In fiscal year 2024, Minhua Holdings achieved operating income of HK$9.474 billion and net profit of HK$1.166 billion, exceeding market expectations. The company plans to pay a dividend of 30 Hong Kong cents per share, with a dividend payout ratio of 50.7%. As domestic market channels advance and overseas demand recovers, the company's performance is expected to grow steadily. [Minhua Holdings achieved growth in both domestic and export revenue in fiscal year 2024] In terms of domestic sales, 2HFY24 achieved revenue of HK$5.982 billion, a year-on-year increase of 11.2%, setting a new record for the FY24 annual revenue to HK$11.987 billion, a year-on-year increase of 8.1%. In terms of export, revenue from 2HFY24/FY24 in the North American market was HK$2.247 billion and HK$4.284 billion respectively, a year-on-year increase of 38.3% and 2.3%; revenue from European and other overseas markets was HK$663 million and HK$1.195 billion, a year-on-year increase of 35.0% and 2.9% respectively. [Raw material prices fell, Minhua Holdings 'profitability increased] The company's FY2024 gross profit margin increased to 39.37%, a year-on-year increase of 0.88 percentage points, mainly due to the decline in raw material prices. The sales expense ratio was 18%, a year-on-year decrease of 1.12 percentage points. The management expense ratio and financial expense ratio were 5.19% and 1.09% respectively, with year-on-year changes of-0.84 percentage points and +0.14 percentage points. Net interest rate increased by 1.47 percentage points year-on-year to 12.51%. [Growth in offline stores, online sales empower brand power] The number of offline stores in FY24 increased by 765 to 7236. Revenue from offline stores increased by 15.3% and 5.8% year-on-year, to HK$4.051 billion and HK$8.149 billion respectively. The company continues to deploy in the sinking market, focusing on improving same-store sales growth and promoting refined store management. Online revenue 2HFY24/FY2024 was HK$1.335 billion and HK$2.621 billion, down 5.9% year-on-year and up 1.8%. It is expected that the company will channel it to offline stores through e-commerce sales platforms to enhance brand power and sales conversion rate. [Risk Warning] We need to be alert to large fluctuations in raw material prices and the risk of a downward trend in the real estate market exceeding expectations.