Jinwu Financial News | According to the HSBC Global Research and Development Report, the improvement in China's real estate data was not reflected in the retail furniture industry due to the decline in domestic consumption of Minhua Holdings (01999). Although Minhua Holdings currently maintains a good export order trend, it will have a negative impact on the company's revenue to a certain extent.
Due to weak domestic consumption and tight export transportation capacity, HSBC lowered Minhua Holdings' revenue forecasts for the 2025-2027 fiscal year by 10.8%, 13.1% and 14.8%, respectively. The gross margin forecast for the 2025-2027 fiscal year has also been adjusted to reflect the impact of short-term product structure changes and the company's ongoing long-term cost control efforts. The target price was reduced by 36% from HK$8.7 to HK$5.6.
According to the bank, as of July 5, Minhua Holdings' price-earnings ratio for fiscal year 2025 was 8 times, which is already at an all-time low. The bank expects Minhua Holdings to have an average compound annual growth rate of 7.9% for the 2024-2027 fiscal year, plus a dividend ratio of 6-8%. HSBC believes that the stock is currently undervalued and maintains a “buy” rating.