In a report released yesterday, Alison Fok from DBS maintained a Hold rating on Vitasoy International Holdings (VTSYF – Research Report), with a price target of HK$9.50.
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Alison Fok’s rating is based on a combination of factors influencing Vitasoy International Holdings. Despite a significant year-over-year earnings increase of 102% for FY3/25, driven by improved operating margins in key regions, the outlook in China remains uncertain due to intense competition. This competitive landscape in China, which is crucial as it accounts for 57% of Vitasoy’s sales, has led to a cautious approach despite improvements in sales execution and business efficiency.
Furthermore, while Vitasoy has seen a recovery in profitability in its core markets, with expectations of gradual improvement in operating margins in Hong Kong and China, and reduced losses in Australia and New Zealand, the overall market conditions remain challenging. The target price has been adjusted to HKD9.5, reflecting a more optimistic view compared to the previous HKD6, but the hold rating is maintained due to the conservative outlook on the company’s prospects in China amidst the competitive pressures.