CLSA has released a research report maintaining its target price of HK$41 for SOFTCARE (HKEX: 02698) along with an "Outperform" rating.

Investors are focused on several key issues, including rising raw material prices, pricing flexibility, the ramp-up of production capacity at the Peru factory, and the detergent business planned to be added in the second half of 2027.

The report cited company management as expecting that the absolute net profit for the second half of 2026 will be roughly flat compared to the first half. Although costs for 2026 have been largely locked in, gross margins in the second half of 2026 still face pressure due to rising oil prices.

According to management, the detergent business planned to be injected from parent company Sunda Group, with sales of approximately US$350 million in 2025, is expected to launch in Latin America starting from the second half of 2027; the region's sales in 2025 were US$30 million to US$40 million.

SOFTCARE, with its unique growth driven by the enormous penetration potential of hygiene products in global emerging markets spanning Africa, Latin America, and Central Asia, remains one of the bank's top picks.