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<Research> Macquarie Cuts SUNART RETAIL (06808.HK) TP to HKD1.3, Slashes Earnings Forecasts; Rating Neutral
Recommend 6 Positive 3 Negative 3 |
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Macquarie published a report stating that offline retail remains the main drag on SUNART RETAIL (06808.HK)'s same-store sales growth (SSSG) and revenue. The company recorded a net loss of RMB196 million for 2HFY2026 ended March, in line with its earlier profit warning. The broker believes SUNART RETAIL lacks strong revenue growth drivers, and that earnings recovery mainly hinges on cost savings. Macquarie noted that weak offline operations led to a 10.6% YoY decline in total revenue. Implied same-store sales fell 10.3% YoY in 2HFY2026, reflecting declines in both customer traffic and average selling price (ASP). Management indicated that the decline in same-store sales narrowed to mid- to high-single digits in May, with offline customer traffic flat YoY. Meanwhile, online operations remained resilient, supported by partnerships in quick commerce with platforms such as Meituan and Ele.me. Macquarie maintains a cautious outlook on SUNART RETAIL, forecasting low-single-digit revenue decline in FY2027, with the company targeting breakeven to a slight profit. Due to uncertain prospects, the broker lowered its TP from HKD1.7 to HKD1.3, representing a 24% cut, and slashed its FY2027 and FY2028 EPS forecasts by 87% and 45%, respectively. However, given the attractive 12% dividend yield, it maintained a Neutral rating on the stock. (da/u) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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