Bank of America Securities released a research report stating that it reaffirmed the “buy” rating of Minhua Holdings (01999), and the target price was raised from HK$6 to HK$10.
According to the report, the 2024 fiscal year results are in line with this forecast, but they are superior to market expectations. After a series of stimulus policies were introduced since late April, investors currently expect the real estate policy to be further relaxed, which is expected to benefit from improved market sentiment, and its risk return is better than that of the furniture industry.
The bank said that Minhua's net profit increased 20% year-on-year to 2.3 billion yuan, and the net profit margin increased 1.5 percentage points to 12.5%, which is roughly in line with the bank's forecast. Both revenue and profit are expected to increase 9% in fiscal year 2025.