Fufeng (546 HK): Food Additives Flavor Company Factors

Independent Insight Provider

KL Lo

Equity Bottom-Up

<p>Fufeng&rsquo;s FY14 result was weaker than market high expectation. Its net profit rose 24% YoY to Rmb626m on the back of margin expansion amid flattish revenue growth. I expect to see some near term headwinds but overall structural trend remains intact. In today analyst meeting, I found the stock is still under-covered by SELL side but it draws a lot of fund managers&rsquo; interest. Here are the key takeaways from the meeting.</p>

Fufeng&rsquo;s FY14 result was weaker than market high expectation. Its net profit rose 24% YoY to Rmb626m on the back of margin expansion amid flattish revenue growth. I expect to see some near term headwinds but overall structural trend remains intact. In today analyst meeting, I found the stock is still under-covered by SELL side but it draws a lot of fund managers&rsquo; interest. Here are the key takeaways from the meeting.

FY14 result below expectation, but structural story remains intact