CLSA has released a research report announcing it maintains a “Hold” rating for WANT WANT CHINA (00151), while trimming its target price by 15.3% to HK$3.05.

The brokerage firm has reduced its net profit forecasts for the company for the fiscal years 2027 to 2029 (ending March 31) by 14% to 20%. According to CLSA, WANT WANT CHINA expects its revenue and profit for the first quarter of fiscal 2027 to decline by 6% and 38% year-over-year, respectively.

The primary reason for this performance drop is that many distributors experienced shrinking profitability from April to June and were forced to exit the market due to intensified competition and price disruptions. Management has indicated that to mitigate the impact of this downturn, it will implement measures such as offering more rebates to distributors, designing differentiated products for various channels to maintain price stability, and enhancing sales team incentives. CLSA notes that resolving these channel issues is not straightforward and will require time.