CCB International has slightly revised down its target price for WANT WANT CHINA (00151) by 1.7% from HK$5.8 to HK$5.7, while maintaining an "Outperform" rating. The bank trimmed its FY2026/2027 earnings estimates by 10%/8%, citing weaker-than-expected interim results for FY2026 and more conservative margin assumptions amid ongoing channel restructuring.

WANT WANT CHINA reported an 8% decline in H1 FY2026 net profit to RMB1.717 billion, missing expectations due to soft gross margins despite a lower effective tax rate. The bank views near-term margin pressure as transitional, expecting long-term normalization.

Early in 2025, the company restructured multiple channel units to capitalize on distribution transformation opportunities. CCB International anticipates continued channel reforms and accelerated innovation to better align with evolving consumer preferences. While short-term margins remain pressured, the strategy is seen as conducive to sustainable long-term sales growth.

The bank currently forecasts 2.4% revenue growth for H2 FY2026, with gross/operating margins declining 0.7/1.6 percentage points, leading to a 4.2% net profit drop. A recovery in earnings growth is projected for FY2027, supported by improved cost conditions and enhanced channel execution.