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Want Want China Holdings Ltd 00151

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Morningstar’s Analysis

Valuation
Currency in HKD
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Economic Moat

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Want Want Reports Respectable Fiscal 2020 but Cost Inflation Looms

Analyst Note

| Philip Gorham, CFA, FRM |

Want Want reported respectable results for year ending March 31, 2021 (fiscal 2020), beating our forecasts for revenue growth but falling short of Pitchbook consensus estimates. The gross margin was 40 basis points above our forecasts and 20 above consensus--this led to similar upside at the EBIT margin. EPS of CNY 0.34 was in line with our and consensus forecasts. We lower our estimates of revenue growth and gross margin in fiscal 2021, primarily due to raw material cost inflation and the modest beat in fiscal 2020.

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Company Profile

Business Description

Want Want specializes in the production and distribution of beverages, dairy drinks, rice crackers, and other snacks. The company opened its first factory in 1994 and has become one of China’s largest packaged-food producers. Its flagship products, such as Hot-Kid milk and Want Want rice crackers, are particularly appealing to children. The name of the company’s core brand, “Want Want,” implies abundance and prosperity in Chinese, which provokes robust demand during holiday seasons.

Contact
132 Nathan Road, Unit 918, 9th Floor, Mira Place, Tower A
Hong Kong, Hong Kong
T +852 27307780
Sector Consumer Defensive
Industry Packaged Foods
Most Recent Earnings Sep 30, 2017
Fiscal Year End Mar 31, 2022
Stock Type
Employees 39,132

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