Bank of America Securities has released a research report adjusting its forecast for HENGAN INT'L (01044). The report indicates a reduction in the core net profit forecasts for 2025 and 2026 by 3% and 1%, respectively. However, citing an improved competitive landscape within the industry, the target price-to-earnings ratio has been increased to 13 times, leading to an 18% rise in the target price to HK$30. While the company lacks strong long-term growth drivers, it offers an attractive dividend yield. The "Neutral" rating was reaffirmed.

The bank anticipates that HENGAN INT'L's revenue for the second half of 2025 will increase by 1% year-on-year to RMB 10.9 billion, attributed to sustained improvement across its three main business segments. Tissue product sales are expected to grow by 5% year-on-year, accelerating from the 3% growth seen in the first half.

Furthermore, the gross profit margin for the second half is projected to improve compared to the first half, reaching 33.1%. This enhancement is primarily driven by an improved product mix and normalized raw material costs in the tissue business. The core net profit for the second half of 2025 is forecast to grow by 8% year-on-year to RMB 1 billion.