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HSBC lifts Vinda Int'l (03331) to HK$20.1
HSBC Global Research lifted its target price for
Vinda International (03331) to HK$20.1 from HK$18.4, and maintained its "buy" rating.
  The research house said Vinda's 2017 profit dropped by 5% y-o-y to HK$621m (8% below 
consensus) on 12% growth in sales. It noted that the cost pressure from rising pulp (47% 
of tissue revenue) peaked in 4Q 2017 as the GPM dropped to 27.9%, the lowest level of the
year, after short fibre pulp prices rose 49% (pulp up by 26% in 2017). 
  Management expects a more prominent effect on tissue ASP in 1Q and 2Q 2018. As the 
heightened pulp prices have driven many smaller mills out of the market, Vinda is
confident of gaining more market share.
  HSBC expects 2018 net profit to go up by 59% y-o-y to HK$984m. It also expects the net 
margin in 2018 to recover to 6.5% from 4.6% in 2017 as the OPM for tissue goes up to 10.6%
in 2018 from 8.5% in 2017 from the recovery in GPM.

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