Risk/Reward Update: HPC and Beauty

Research evidence excerpt

Risk/Reward Update: HPC and Beauty

Update

June 23, 2026 12:31 AM GMT

Morgan Stanley Asia Limited+MChina Consumer | Asia Pacific Dustin Wei

Equity Analyst

Risk/Reward Update: HPC and Dustin.Wei@morganstanley.comJenny Yu +852 2239-7823

Research Associate

Jenny.Yu1@morganstanley.com +852 3963-1925

Beauty Lillian Lou

Lillian.Lou@morganstanley.com +852 2848-6502

This report covers our changes for Hengan, C&S Paper, and

Shanghai Jahwa.

Hengan (1044.HK; EW): Tissue should remain Hengan’s key growth driver,

supported by volume growth and share gains, but revenue growth is likely to stay

moderate due to ASP pressure from online and new retail channels. Tissue margin China/Hong Kong Consumer

should be stable in 2026 due to favorable pulp prices, while sanitary napkins and Asia Pacific

Industry View In-Line

diapers are still under pressure from intense competition and weak demand. Overall

What’s Changed

margins may edge down as the company invests more in branding and channel

C&S Paper Co Ltd (002511.SZ) From To

expansion. Despite lukewarm earnings trends and a lack of upside catalysts in the Price Target Rmb5.60 Rmb5.70

near term, Hengan's commitment to Rmb1.4+/share annual payout, equivalent to

Shanghai Jahwa United Co.

~6% dividend yield now, supports its share price, leading to our EW rating. Ltd. (600315.SS) From To

Price Target Rmb16.00 Rmb14.00

C&S Paper (002511.SZ; UW): C&S Paper’s revenue growth should remain mostly Hengan International Group

volume- and share-gain-driven, as smaller players exit, but pricing power remains (1044.HK) From To

Price Target HK$24.00 HK$23.00

limited. Online and new retail channels should support volume growth, but higher

promotion and sharper pricing may continue to dilute ASP and limit margin upside.