Buy Rating for Cafe de Coral Holdings Ltd. Amid Strategic Expansion and Market Resilience

In a report released today, Alison Fok from DBS maintained a Buy rating on Cafe de Coral Holdings Ltd. (0341 – Research Report), with a price target of HK$9.90.

Alison Fok has given her Buy rating due to a combination of factors influencing Cafe de Coral Holdings Ltd. Despite facing challenging macroeconomic conditions in Hong Kong, the company remains a leading player in the fast food sector with a robust presence in both Hong Kong and Mainland China. The company’s strategic focus on expanding its store network in the Greater Bay Area is expected to support a sales CAGR of 2% from FY24 to FY26, which is a positive indicator for future growth.
Moreover, Cafe de Coral is actively working to counteract the recent decline in same-store sales by implementing promotional campaigns aimed at increasing store traffic. Although the target price has been adjusted to HKD9.9 due to softer sales expectations, the company’s efforts in market consolidation and its potential for positive reception in key areas are seen as catalysts for future performance. The Buy rating reflects confidence in the company’s ability to navigate current challenges and capitalize on growth opportunities.