Recent changes to Chinese import regulations under cross border e-commerce have prompted speculation on the impact on MG Unit Trust but Macquarie observes the outcome is still unclear as to which companies will be affected.
The main impact is likely to be on the company’s adult milk powder sachet business. Still, the drawn-out process is being disruptive to the business and the broker suspects distribution costs may increase. Outperform and $2.60 target retained.
Sector: Food Beverage & Tobacco.
Target price is $2.60.Current Price is $2.01. Difference: $0.59 – (brackets indicate current price is over target). If MGC meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges – negative figures indicate an expected loss).