Food stocks with outstanding performance and strong performance under the market’s hides continued to build, especially for individual food stocks
Among them, Master Kong (00322) not only launched new high-end self-heating pasta products earlier, coupled with the company’s acquisition of Master Kong beverage shares, it is estimated to be beneficial to the company’s profit performance. In addition, China’s Want Want (00151) is expected to continue to increase its gross profit margin next year and the introduction of new production capacity, which is expected to be beneficial to the stock price repeatedly.
A few more days ago, Master Kong made another move. The company announced that it would acquire approximately 5% of the shares of Master Kong Beverages from Ting Hsin for US $ 203 million. After the completion of the acquisition, the company ’s equity in Master Kong Beverages will increase from approximately 77.9% to approximately 82.9%. Helped to further develop the beverage business and supported the stock price to rise to a three-month high yesterday.
CICC said that the transaction is expected to improve the profitability of the beverage business
Based on the 2018 Master Kong beverage profitability, it is expected to increase its net profit by 6 to 7% and contribute about 1.4% to the overall profit. The management also stated that the company will consider increasing its holdings on the premise that the seller intends, the price is reasonable, and it is beneficial to shareholders. CICC pointed out that the company has sufficient cash on hand, especially this year’s cash balance is 16 billion yuan. The transaction is valued at approximately RMB 1.4 billion and will be paid by own funds. With strong free cash flow, management expects the transaction will not affect its dividend policy.
CICC also expects that the company will still improve production efficiency through asset activation and other methods next year, and will set up a back-office sharing center to improve management efficiency, and “Master Master” and other systems to improve distribution efficiency. At the same time, the company’s product structure adjustment pace is expected to accelerate from next year, launch more new products on the high price band to improve the gross margin level, maintain the “outperform industry” rating, and maintain a target price of HK $ 17.5.
Super Hot Noodles Hot Sale
It is worth noting that the company launched a new high-end noodle product last month, the Suda Noodle House self-heating noodles, and the related sales recorded a very bright result on Double Eleven.
CICC said that the company divided the instant noodles into five levels according to the price band, which were unit prices of 3 to 4 yuan, 5 yuan, 6 to 10 yuan, 10 to 15 yuan, and more than 15 yuan. Last month, the company took the lead in launching the self-heating noodles of the fifth-tier new product (priced at 30 yuan), and will launch high-end cooking noodles priced at 18 to 20 yuan. Later, it will launch new products at the price band of 7 to 15 yuan. Improve the layout on multiple price bands.
On the other hand, China Want Want (00151) not only delivered good results earlier, but the gross profit margin and new production capacity are expected to increase next year, supporting the stock price to rise upward and break through a year high, closing 0.9% to HK $ 7.35.
Galaxy Securities stated that Want Want’s interim results were not only better than expected, but the gross profit margin was even higher during the period. The company is exploring new sales channels to promote sales growth, and its overseas expansion will be more obvious in fiscal 2021, especially its Vietnam plant will be put into production in the third quarter of 2020, which is expected to become one of long-term growth drivers, maintaining ” “Overweight” rating with a target price of HK $ 8.2.
In addition, First Shanghai estimates that the company’s revenue growth in the second half of the fiscal year is expected to accelerate month-on-month. It is estimated that Want Want’s gross profit for the full year of 2020-2022 will reach 49.4%, 49.5%, and 49.6%, respectively.
Strategically, holders can continue to hold, while those who are out of stock can wait for the stock price to retrace to 10 antennas, and take a small bet. If it falls below 6.52 yuan, it will be a stop loss.