Citi's latest research report indicates that CHINA OVS PPT (02669) delivered a mixed set of results for the first half of the year. The company's earnings declined by 9%, weighed down by margin pressures and short-term costs associated with its repositioning efforts.

The bank believes that ongoing portfolio reshaping and technology integration will help protect profit margins. This strategy underpins Citi's forecast for stable earnings in the second half of 2026, while projecting a 5% decline for the full year. Subsequently, earnings are expected to recover with a year-on-year growth of 3% to 5% between 2027 and 2028.

Citi noted that the increase in interim dividends came as a positive surprise. Based on a dividend yield of 6.2%, the firm maintains its "Buy" rating on the stock. However, the target price has been lowered to HK$4.5, down from the previous HK$5.2.