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CICC starts Man Wah Holdings (01999) at HK$9.5
CICC Research initiated coverage on Man Wah Holdings (01999) with a "buy" rating and a target price of HK$9.5.
  The research house said Man Wah's transformation from export-oriented manufacturing to a
consumer brand in China will lead to further earnings growth and a potential stock 
revaluation.
  It expects potential demand growth for recliners as the product now only accounts for
10% of total sofa sales in China, while the percentage is 40% in the US. CICC believes Man
Wah will benefit from distribution channel development and an increased variety of 
products.
  It expects the transformation to drive Man Wah's domestic sales to generate >50% of its
revenue and profit in FY2018, and the stock to be revalued from 12-15x P/E to 17-20x P/E.
 CICC also forecast EPS of HK$0.56 for FY2018 (+21.5% YoY) and HK$0.67 for FY2019 (+20.2%
YoY)

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