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Nikkei Markets

MARKET BUZZ: Dali Foods At Record Highs; Daiwa Initiates At Buy

By Hong Kong Newsroom
Nikkei Markets
HONG KONG (Oct 12) -- Dali Foods Group advances 1.3% to HK$6.15. Daiwa Capital Market says company's business model stands out with focus on developing fast growing snacks and beverage segment in China. Starts coverage with Buy rating and target price of HK$7.10. House notes Dali's pricing strategy of more wholesale discounts and lower retail prices attractive to consumers and distributors, helping it capture market share "We forecast Dali's revenue to expand at a 13% CAGR over 2016-19E (vs. 6% YoY in 2016), fuelled by new products such as soymilk and further market-share gains in baked products," it says in note. Says, Dali attractively valued based on price/earnings to growth ratio at 1.1X vs. 1.4X average of its China peers, and considering 4% dividend yield over 2018-19E. "We expect the stock to be rerated as Dali continues to report strong earnings growth and deliver steady dividends over 2017-19E."
- By Hong Kong Newsroom; hkeditorial@nikkeinewsrise.com; +852 3960 5102
- Edited by Nimesh Vora
- Send Feedback to feedback@nikkeinewsrise.com
- Copyright (c) 2017 Nikkei NewsRise Asia Pte Ltd.

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