Bank of America Securities issued a research report stating that it has lowered its core net profit forecasts for HENGAN INT'L (01044) by 3% and 1% for 2025 and 2026, respectively. However, due to an improved competitive landscape in the industry, the target price-to-earnings ratio has been raised to 13 times, leading to an 18% increase in the target price to HK$30. Although the company lacks long-term growth catalysts, it offers an attractive dividend yield. The "Neutral" rating was reaffirmed.

The institution expects HENGAN INT'L's revenue for the second half of 2025 to grow 1% year-on-year to RMB 10.9 billion, driven by continued improvement across its three main business segments. Tissue product sales are projected to increase by 5% year-on-year, accelerating from the 3% growth seen in the first half. Additionally, the gross profit margin for the second half is expected to rise compared to the first half, reaching 33.1%, primarily due to improved product mix and normalized raw material costs in the tissue business. Core net profit for the second half of 2025 is forecasted to grow 8% year-on-year to RMB 1 billion.