Jefferies: Raising Yihai International's (01579) target price to HK$18.9 to maintain “buy” rating

The Zhitong Finance App learned that Jefferies released a research report saying that third-party revenue increased by more than 46% year-on-year in the first half of this year. Jefferies pointed out that by promoting localization strategies, the profitability of Yihai International (01579) has improved, and the net profit margin of overseas business has reached about 8%, which is expected to surpass mainland China's business in the long run. Based on the latest performance, the bank raised its 2026-2028 profit forecast by 4% to 6%, and raised the target price from HK$17.8 to HK$18.9, maintaining a “buy” rating.

Yihai International's third party business and overseas business performed strongly in the first half of this year. Management maintained the guidance of double-digit third-party sales growth throughout the year. Thanks to improved supply chain efficiency and process optimization, gross margin expectations remained stable. The company plans to maintain a high dividend policy, and short-term capital expenditure requirements are limited, subject to future free cash flow and potential overseas mergers and acquisitions.