Want Want: Lunar New Year Sales to Drive Fiscal Second-Half Sales Growth; Retaining Fair Value

We reviewed our fiscal 2024 (ending March 2025) earnings forecasts for narrow-moat Want Want. We reduced our net income estimate by 2%, while leaving revenue projection unchanged. The cut to net income is due to higher operating expenses and lower interest income forecasts. We continue to anticipate an acceleration in sales growth in the fiscal second half versus the first half, thanks to gifting demand during the Lunar New Year period and resilient overseas sales. Our longer-term forecasts are largely unchanged and we retain our fair value estimate at HKD 6.40 per share, which implies 16 times fiscal 2024 price/earnings and 10 times enterprise value/EBITDA. We view shares as undervalued, offering an attractive dividend yield of over 6% at the current share price.