By Yi Wei Wong

Shares of Shanghai-based food supplier Tingyi (Cayman Islands) Holding Corp. plunged in early trade after a consumer-rights television show exposed poor hygiene standards at food-processing companies that said they supply Tingyi and others.

The company's shares were down 13% at HK$12.02 in mid-morning trade Wednesday.

In a statement on its website, Tingyi said one of the companies mentioned in the show supplied it with raw materials used in pickle packs for a certain brand of instant noodles. The company apologized for the oversight and said it has set up an internal committee to investigate the matter.

Jefferies maintained its buy rating on the company and its target price of HK$13.86, noting that the noodles Tingyi mentioned are a low-margin product and account for just around 4% of sales.

"We do not think this will affect demand for their other flavors," the investment bank said in a research note, referring to Tingyi and another affected company, Uni-President China Holdings Ltd. "It is likely, however, that both companies will invest in further brand-building, thereby incurring additional marketing expenses."


Write to Yi Wei Wong at yiwei.wong@wsj.com


(END) Dow Jones Newswires

03-15-22 2354ET