Product price increases to continue
? Tingyi reported sales of Rmb74.1bn, up by 9.6% yoy in FY21, and net profit of Rmb3.8bn, down by 6.4% yoy, in line with our expectations.
? Because of the uncertainty of the international situation, the prices of palm oil, PET and sugar are expected to increase by double digits yoy in FY22F.
? Tingyi raised the selling price of its classic noodles in early Feb, and management said the price increase process was implemented quite well. The Company is trying to increase the price of its bottled water products in its strong areas, and it does not rule out the possibility of price increases for its other beverage products in FY22F.
? Reiterate Add with a new DCF-based TP of HK$19.0.