S&P Global Ratings expects Health and Happiness International Holdings (HKG:1112) to further boost its finances in 2026, especially with a rebound in the China-focused infant milk formula segment, according to a recent release.

The rating agency sees sales in the segment further grow by 6% this year, following a 26.5% increase last year due to a product formulation.

S&P also expects the company to increase its market share, especially following product recalls by some international rivals in China, while the launch of new human milk oligosaccharide products should further contribute to the outlook.

The company should continue to channel free cash flow for repayments amounting to 300 million yuan to 500 million yuan annually and dividend payouts of about 200 million yuan.

These should help the company's debt-to-EBITDA reach 3.6x this year, S&P said.

Production costs could moderately rise given increased freight and packaging costs amid rising crude oil prices from the Middle East war, the rating agency said.