CMB International Securities analyst Miao Zhang maintained a Buy rating on New Hope Service Holdings Limited (3658 – Research Report) yesterday and set a price target of HK$2.67.
Miao Zhang has given his Buy rating due to a combination of factors including New Hope Service Holdings Limited’s strong financial performance and strategic growth initiatives. The company’s revenue for FY24 increased by 17% year-over-year, surpassing expectations, driven by growth in managed gross floor area and robust retail and catering services. Additionally, the net profit rose by 5% year-over-year, aligning with the company’s guidance despite challenges such as a decline in gross margin and a reduction in SG&A ratio.
Miao Zhang also highlights the impressive third-party expansion, with a significant increase in new contract value and a rise in average property management fees, indicating a shift towards more high-end projects. The company’s counter-cyclical value-added services business, stable parent company, and attractive shareholder returns, including a projected 9.7% dividend yield in 2025, further support the Buy rating. Despite a slight revision in the target price to HK$2.67 to reflect lower earnings forecasts, the stock remains appealing due to its current trading valuation and growth prospects.
3658’s price has also changed slightly for the past six months – from HK$1.910 to HK$1.940, which is a 1.57% increase.