DBS has issued a research report reiterating a 'Hold' rating on VITASOY INT'L (00345), while lowering its target price by 3% to HK$6.8. The bank maintains its target valuation at 27 times the forecast price-to-earnings ratio for the next 12 months. The report expresses continued caution regarding the company's outlook due to intense competition in the Mainland China market.

The company's core net profit for the 2026 fiscal year declined by 4% year-on-year, which largely aligned with the bank's expectations. During the period, revenue from the Mainland China business fell by 5% to HK$3.2 billion. Growth across all channels, including snack chains and warehouse stores, was offset by a structural decline in the general trade segment. Hong Kong business revenue decreased by 3% year-on-year to HK$2.2 billion, primarily impacted by operations in Macau and the Vitasoy World business, though a recovery has since largely taken place.

The report notes that the Mainland China business is currently in a transition phase with new sales leadership. Management is working closely to accelerate the process of bringing products to market. Due to a downward revision in gross margin expectations, DBS has lowered its profit forecast for Vitasoy's 2027 fiscal year by 7% and has also introduced its initial forecast for the 2028 fiscal year.