Morningstar Raises Fair Value Estimate for Want Want China by 2% to HK$6.5 per Share

Stock News
Mar 17

Morningstar has released a research report indicating an increase in the fair value estimate for Want Want China, a company with a narrow economic moat, by 2% to HK$6.5 per share. The adjustment is primarily attributed to the strengthening of the renminbi and the impact of the time value of money. The report notes that Want Want China is set to announce its full-year results for the period ending March 2026 in June of this year. Morningstar maintains its revenue forecast for the company, citing growing sales from emerging channels. However, due to increased promotional expenses and rising input costs in the coming year, the firm has lowered its net profit forecast by 3% to 5%. Management at Want Want China emphasized that expansion into emerging channels is expected to boost sales over the next two years. To meet evolving consumer demands, the company has increased investments in fast-growing e-commerce platforms, leading to higher sales expenses in the latter half of the year. Palm oil is a major input cost for Want Want's rice cracker and snack business. Recent surges in palm oil prices, coupled with heightened uncertainty in commodity markets—particularly crude oil—may exert pressure on gross margins in the upcoming fiscal year.

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