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<Research>HSBC Global Research Hikes TP of SUNART RETAIL (06808.HK) to $1.7, Rates Hold
Recommend 17 Positive 17 Negative 12 |
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HSBC Global Research wrote in a report that SUNART RETAIL (06808.HK) posted a net loss of RMB1.6 billion in FY24, compared to the broker's forecast of break-even, with revenues declining 13% YoY, below the broker's forecast by 8%. Separately, Lin Xiaohai has resigned as the company's CEO due to the re-designation of his position to another business of BABA-SW (09988.HK), SUNART's controlling shareholder. He was replaced by Shen Hui. In Shen's two months on the job, he has tried to steer the company back to its "Retail" roots, focusing on price competitiveness and customer experience, and the initial results have been encouraging. However, given the potential changes in its controlling shareholder, there may be limited scope for the new CEO to implement long-term measures, and profitability may struggle to return to industry averages. In view of SUNART's uncertainties, HSBC lowered its revenue forecast for FY26 by 10% to RMB78 billion, while its profit forecast remained largely unchanged at RMB523 million. The broker also trimmed its FY25 profit forecast to RMB61 million. The broker maintained a Hold rating on SUNART and hiked its target price by 50% from $1.13 to $1.7, mainly reflecting the stable business fundamentals after the CEO change. AAStocks Financial News |
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