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Tingyi Gives Cautious Earnings Guidance for 2023

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Securities In This Article
Tingyi (Cayman Islands) Holding Corp
(00322)

Narrow-moat Tingyi 00322 reported 2022 results that were below Refintiv consensus on the top line and net profit, but slightly above our estimates. Management guided to 2023 net profit that was below consensus estimates, as the company intends to raise channel expenses in order to gain back market share. We think the company’s net profit guidance is cautious and think it could benefit from reviving foot traffic as well as lower input costs in 2023. While there could be near-term headwinds to the share price with the below-consensus profit guidance, we maintain our fair value estimate at HKD 14.9 per share (19 times 2023 P/E) and believe investors could consider the stock price correction as an entry point opportunity.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Jacky Tsang

Equity Analyst
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Jacky Tsang is an equity analyst for Morningstar Asia Limited, a wholly owned subsidiary of Morningstar, Inc. He covers the Greater China consumer defensive sector, which includes packaged food, home care, food retail, and personal products companies.

Before joining Morningstar, Tsang was the research lead at GfK, where he covered a variety of listed companies, notably in the consumer durables and electronics sectors across the Asia-Pacific region. He has presented as an industry expert at various sell-side investor conferences. He also worked previously with Coleman Research, where he conducted primary industry research and helped generate leads for clients seeking channel checks.

Tsang holds a bachelor's degree (first class) in English studies from The Hong Kong Polytechnic University.

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