Hengan (01044.HK) FY2023 records solid growth, premium high margin products continue to experience significant growth June 10, 2024 54

PSR Recommendation: BUY Status: Upgraded
Target Price: HKD35.18

Company Profile
Hengan founded in 1985, is a famous manufacturer of household paper and maternal &
child hygiene products. The market shares of the three leading products, namely women’s
sanitary napkins, baby diapers, and household tissues, is among the best in the domestic
market.
FY2023 still records solid growth
For the year ended 31 December 2023 (FY2023), Hengan’s revenue increased by 5.1% to
RMB23,768mn, above market expectation. During the year, operating profit increased
significantly by 38.6% to RMB3,978mn (FY2022: RMB2,869mn). Although the depreciation of
the Renminbi against the US dollar and the HK dollar during the year resulted in an
operating foreign exchange loss after tax of RMB150mn, the loss was significantly reduced
by about 83.6% compared with the operating FX loss before tax of RMB901mn in 2022.
Therefore, profit attributable to shareholders of the Company was RMB2,801mn (FY2022:
RMB1,925mn), representing a significant yoy increase of 45.5%. Excluding the operating FX
loss after tax, profit attributable to shareholders of the Company increased by 4.3% yoy,
mainly reflecting the improvement in the company’s gross profit margin as a result of the
decline in the cost of wood pulp and upgrades of products. Basic EPS was RMB2.415 (FY2022:
RMB1.657), with full-year dividend RMB1.40 per share, unchanged yoy.

About the author

Profile photo of Eric Li

Eric Li
Analyst
Research

李浩然先生(Eric Li) 高級分析師 現任現為輝立証券持牌高級分析師,曾任職股票基金、家族辦公室及證券公司等,擁有多年的證券研究部門從業及投資經驗,並先後於香港最暢銷的財經媒體撰寫投資專欄。畢業於香港理工大學電子計算系。 Eric is currently a licensed research analyst at Phillip Securities. Prior to joining Phillip Securities, he has years of equity research and investment experiences in asset management company, family office and securities company. Meanwhile, he has written investment columns in Hong Kong`s best-selling financial media for years. He holds Bachelor of Arts in Computing from The Hong Kong Polytechnic University.

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