CLSA has issued a research report stating that Tingyi (HKEX: 00322) is maintaining its 2026 guidance, expecting low single-digit year-on-year revenue growth and reported net profit at least flat compared to the prior year.

The business is broadly progressing according to plan, with uncertainty mainly stemming from raw material costs, as visibility on next year's raw material prices remains limited. The brokerage maintains its Outperform rating and a target price of HK$13.70.

The report notes that instant noodle sales accelerated in July and August compared to the 2% growth seen in the first half, while also expanding market share. Beverage sales were roughly flat year-on-year in July and August, slightly weakening from the 0.7% growth recorded in the first half.

Palm oil costs have been locked in through the end of 2026, so recent price increases will not affect this year's profit margins but will pose pressure on next year. PET is procured from the market as needed, and higher prices will weigh on second-half profit margins, though management believes the impact has already been factored into the full-year guidance.

The company has no short-term plans to raise prices and considers the likelihood of price increases next year to be low, depending on the degree of cost pressure.

Over the medium to long term, the report notes that the company targets mid single-digit year-on-year revenue growth and double-digit year-on-year profit growth. Management believes withholding tax risk is manageable and may consider paying dividends from foreign exchange cash to mitigate higher tax rate risks, noting that only the beverage subsidiary faces this risk and that the exposure is very small.