Back on the growth track
■ Evergreen Products (Evergreen) is a leading manufacturer of hair goods, including wigs, hairpieces, braids and high-end human hair extensions.
■ Evergreen reported a net loss of HK$16.2m in 2020 and is expected to turn around with margin recovery in 2021, as business has been returning to normal.
■ New initiatives will be growth drivers for Evergreen in the medium to long term.
■ We initiate with ADD and a target price of HK$1.00, based on 12x 2021 P/E, with expectations of net profit growth at a CAGR of 45.7% from 2021F to 2023F.
Evergreen Products has lagged behind the other HK-listed ODM/OEMs. We see
potential for catch-up.