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Huatai Securities Cuts SUNART RETAIL (06808.HK) TP to HKD1.7, Rates Overweight
Recommend 9 Positive 5 Negative 7 |
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Huatai Securities issued a report noting that SUNART RETAIL (06808.HK) recorded a 10.6% YoY decline in revenue for the second half of the fiscal year ended March, with a loss of RMB200 million. Weak consumer demand and intensifying industry competition weighed on performance. The new management team has steadily advanced its reform plan, systematically promoting changes across the supply chain, store operations and organizational structure. Adjusted EBITDA for the last fiscal year reached RMB3.16 billion, providing cash flow support for its high-dividend strategy. The company declared a full-year cumulative dividend of HKD0.255 per share. The broker stated that, given soft downstream demand and fierce competition among terminal retailers, it lowered its net profit forecasts for fiscal years 2027 and 2028 to RMB60 million and RMB370 million, respectively, and introduced a fiscal year 2029 forecast of RMB440 million. As the company is still in a turnaround phase in fiscal year 2027, the broker selected fiscal year 2028 as the valuation benchmark. Considering managements steady execution of reform initiatives, initial results from new business formats and the attractiveness of its high dividend yield, the broker assigned a target price of HKD1.7, down from HKD2.18, based on 38x fiscal year 2028 forecast PE (previously 45x fiscal year 2027 forecast PE). As reform measures gradually take effect, progress in earnings recovery warrants attention. The Overweight rating is maintained. (da/j) 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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