Want Want Earnings: Soft Sentiment Weighed on Snack Food Sales; Retain Fair Value Estimate

Narrow-moat Want Want’s first-half fiscal 2024 (ending March 2025) revenue and net profit trail our estimates, primarily due to soft sales volume in the snack food segment. partially offset by input costs tailwind and improved operational efficiencies. We moderately reduce our 2024-28 revenue and net income projections by 2%, but keep our fair value estimate at HKD 6.40 per share. We continue to view shares as undervalued, as Want Want has been making progress in channel and product transitions that should maintain its competitiveness. In addition, the estimated fiscal 2024 dividend yield of 7.2%, backed by the firm’s strong net cash position as of the end of September, also looks attractive to investors, in our view.