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Macquarie cuts Uni-President China to HK$7.8

  Macquarie Research lowered its target price for 
Uni-President China (UPC)(00220) to HK$7.8 from HK$8.4, and reiterated its "buy" rating.
  The research house said UPC's 2H 2017 revenue came in 2.9% behind Macquarie's estimate 
due to softer instant noodles sales. Meanwhile, net profit arrived at Rmb309m, implying
losses narrowed from Rmb149m in 4Q 2016 to Rmb57m in 4Q 2017.
  After smoothing out the quarterly sales fluctuations and normalizing channel inventory 
last year, Macquarie expects UPC to deliver 20% YoY net profit growth this year. But it
lowered its FY2018 and FY2019 earnings by 8.3% and 7.1% respectively.
  After four years of volume decline, China's noodle market saw volume resuming small
positive growth of +0.3% YoY in 2017. Macquarie maintained its positive view on the
premiumization strategy and expects noodle operating profit margin to further edge up
0.2ppt YoY to 5.3% this year. 

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