Earnings miss on soft margins amid transition; dividend payout cut again

Research evidence excerpt

Earnings miss on soft margins amid transition; dividend payout cut again

iQprofile SM Want Want China

Key Income Statement Data (Mar) 2025A 2026A 2027E 2028E 2029E Company Sector

(CNY Millions) Food Producers

Sales 23,511 24,401 24,908 25,356 25,754

Gross Profit 11,189 11,298 11,682 11,899 12,093

Sell General & Admin Expense (6,035) (6,891) (6,910) (6,984) (7,042) Company Description Operating Profit 5,837 5,021 5,386 5,530 5,666

Net Interest & Other Income (98) (54) (6) (2) 3 Want Want China is a leading producer of rice crackers,

Associates 0 (14) 0 0 0 dairy beverages and confectionery products in China. The

Pretax Income 5,740 4,952 5,380 5,528 5,669 company was first established in Taiwan and entered the

Tax (expense) / Benefit (1,411) (1,124) (1,401) (1,440) (1,476) China market in 1992 and has since become a diversified

Net Income (Adjusted) 4,336 3,837 3,989 4,098 4,203

F&B company. It manufactures its products under the

Average Fully Diluted Shares Outstanding 11,810 11,803 11,803 11,803 11,803

widely recognized 'Want Want' brand. The company was

Key Cash Flow Statement Data

listed on the HKEx in March 2008, and the founding Tsai

Net Income 4,336 3,837 3,989 4,098 4,203

family collectively owns 48% of the listco. Depreciation & Amortization 730 674 528 601 673

Change in Working Capital (621) 371 (2,325) 1,860 (1,893)

Deferred Taxation Charge NA NA NA NA NA

Other Adjustments, Net 1,571 1,101 1,402 1,438 1,472 Investment Rationale

Cash Flow from Operations 6,015 5,983 3,594 7,998 4,456 We rate Want Want Underperform on its weakening brand

Capital Expenditure (635) (1,204) (1,325) (1,391) (1,461) equity, lack of innovation capability and prolonged

(Acquisition) / Disposal of Investments 354 2,660 0 0 0

structural headwinds facing by its core product Hot-kid milk