Key Takeaways:
Daiwa has lowered its price target for Guming (01364.HK) to HK$32 from HK$36, citing a more prudent outlook on the company's store expansion and near-term sales pressure. The new target still implies a significant 42.2% upside from its current price.
"The share price has fallen by about 18 percent from the second quarter to date," Daiwa said in a research report, attributing the decline to concerns over slowing same-store sales growth and a less aggressive pace of new store openings. The firm maintained its "Buy" rating on the stock.
The brokerage revised its earnings per share forecasts for the period from 2026 to 2028 downwards by 4 to 5 percent. The adjustment reflects data from Narrow Door Dining Eye showing Guming opened 590 new stores in the first four months of this year, a pace Daiwa noted was "significantly slower" than the market's prior estimate for a net increase of 3,345 stores for the full year.
The report highlights a tension between Guming's long-term growth story and near-term execution challenges. While the "Buy" rating indicates continued confidence, the reduced forecasts and price target suggest investors are recalibrating their expectations for the pace of the company's expansion in a competitive market. The next catalyst for the stock will be the company's interim results, which will provide an update on store opening figures and sales trends.
This article is for informational purposes only and does not constitute investment advice.
