Goldman Sachs initiates coverage on Anjoy Foods stock with Buy rating

Goldman Sachs has initiated coverage on Anjoy Foods Group (2648:HK) with a Buy rating and a HK$72.00 price target, projecting a 20% upside and a 6% dividend yield. The firm identifies Anjoy as the largest player in China's quick-frozen food market and forecasts a 9.5% compound annual growth rate for sales and an 11% CAGR for net profit from 2024-2027, driven by market penetration, continued share gains, and an anticipated margin recovery beginning in 2026.

Analysis

Goldman Sachs has initiated coverage on Anjoy Foods Group (2648:HK) with a 'Buy' rating, setting a price target of HK$72.00 which suggests a 20% potential upside complemented by a 6% dividend yield. The firm's thesis positions Anjoy as the dominant leader in China's Rmb221 billion quick-frozen food market, where it currently holds a 6.6% share. The positive outlook is underpinned by projections for a 9.5% sales compound annual growth rate (CAGR) and an 11% net profit CAGR from 2024 to 2027. This growth is expected to be fueled by Anjoy's operational scale, extensive distribution channels, and continued market share consolidation. Furthermore, Goldman Sachs anticipates a modest margin recovery commencing in 2026, driven by a less intense competitive landscape and a strategic shift in product mix towards higher-value items.

Key Decisions for Investors

• Investors may consider the 'Buy' initiation from Goldman Sachs a significant positive signal, supported by the dual attractions of a 20% price upside and a substantial 6% dividend yield.
• The investment case is long-term, as key catalysts such as margin recovery are not expected until 2026, suggesting the position is better suited for investors with a multi-year holding period.
• Traders should monitor Anjoy's execution on gaining market share in the fragmented Chinese frozen food sector and watch for early signs of the forecasted margin improvement as key validation points for the thesis.