The Zhitong Finance App learned that Citibank released a research report saying that Minhua Holdings (01999) earlier reported that the net profit for the half year ending September 2026 was reduced by 70% to 90% year on year. The bank still maintained a “buy” rating. The target price was cut from HK$5.6 to HK$3.6, but it indicated that Minhua Holdings was still the only company in Citigroup's China Home Furnishing sector to receive a “buy” rating. It maintained a “sell” rating for the same industry European Home Furnishing and Sophia Home Furnishing.

Citi pointed out that the decline in the Group's profit in the first half of the fiscal year was mainly affected by rising prices of chemical raw materials and one-time impairment of the US business Southern Motion, which was acquired in December 2025. Citi expects net profit for the second half of the fiscal year to rise about 1.8 times to HK$664 million compared to the first half of the fiscal year due to the increase in average sales prices after the launch of new products. Net profit for the year is expected to rise to HK$894 million and rise to HK$1,796 million in 2027.

Citi believes that Minhua Holdings dominates the functional sofa market in China and the US, benefiting from stable replacement demand in the Chinese and US markets and the continued increase in the penetration rate of functional sofas. The bank believes that Minhua Holdings can gradually improve its profit performance after completing the restructuring of the US business.

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