Tissue Segment Fueled 2022 Sales Growth, but Didn't Flow Through To Bottom Line; FVE Remains HKD 40

No-moat Hengan reported fiscal 2022 results in which top-line and net profit missed Refinitiv consensus estimates. We keep our fair value estimate unchanged at HKD 40 per share, which implies 13 times 2023 P/E, consistent with the five-year average. We do not expect a near-term catalyst to the stock due to the absence of turnaround signals in its medium-term growth outlook. The major overhang for the company remains the lack of a growth driver for its profit engine, the sanitary napkin business.