Citi released a research report stating that it reaffirmed the “buy” rating of H&H International Holdings (01112) and lowered the target price from HK$15.6 to HK$11.8. The company initially expects net profit to drop by 45 to 55% in the first half of the year, and adjusted net profit to drop by 30 to 40%, which is lower than the forecast.
The bank believes that the decline in profit is due to the decline in the number of units, EBITDA profit margins, and higher financing costs compared to the same period last year. Both revenue and EBITDA profit trends were lower than expected, mainly due to ANC's sales slowdown in the second quarter, BNC's reduction in operating leverage due to declining sales, and PNC
The cost of restructuring.