Analysts at Jefferies have revised their profit forecast for Want Want China (HKEX: 00151) downward by 8% to 11%. Consequently, the firm has reduced its target price from HK$5.48 to HK$4.40, while reaffirming its "Hold" rating on the stock.

The company's sales for the second half of its fiscal year showed a year-on-year increase of 5.2%. However, this was offset by rising raw material costs and higher selling, general, and administrative (SG&A) expenses, which led to a 14.3% year-on-year decline in net profit. During this period, the dividend payout ratio was also lowered to 30% from 40% in the 2025 fiscal year.

The report notes that while the industry is expected to face challenges in the first quarter of fiscal year 2027 (April to June this year), Want Want's management anticipates that new sales channels will remain a key growth driver. Furthermore, the company expects the cost pressure to ease as it has secured lower-priced imported whole milk powder for the next 6 to 9 months, which is projected to support a recovery in gross margins for fiscal year 2027.