UBS: Target price of HK$41 for the “Buy” rating for the first time

The Zhitong Finance App learned that UBS released a research report stating that it has a “buy” rating for the first time, with a target price of HK$41. The company is uniquely positioned to capture the long-term structural growth of hygiene products consumption in Africa, benefiting from a favorable demographic structure, low category penetration rate, and decades-long economic and consumption growth runway. As a regional leader, it is an enduring moat based on scale, localized manufacturing, distribution, and execution.

The bank believes that Comfort can maintain a 15% compound annual growth rate of sales from 2026-2028 while maintaining a resilient profit margin structure. As foreign exchange dynamics may shift to a smooth wind and the additional selectivity of Latin American expansion, the bank sees an 18-fold price-earnings ratio corresponding to a compound annual growth rate of 15% per share in 2026-2028. As an attractive risk-return allocation, it has the potential for compound long-term profit growth.

The bank also predicts that LeComfort's profit margin structure will remain stable in 2026-2028, benefiting from cost efficiency driven by its localized manufacturing footprint and scale advantage. Potential foreign exchange downturns also support average selling prices. Furthermore, the outlook for raw material prices is stable, reducing fluctuations in import costs. Looking forward to the future, the bank is optimistic that penetrating Latin America will bring the potential to increase profit margins. Latin American retail ASP is higher than that of Africa, and with diversification of business geography, it is expected to achieve higher structural profitability.