In a report released on June 20, Walter Woo from CMB International Securities downgraded Cafe de Coral Holdings Ltd. (0341 – Research Report) to a Hold, with a price target of HK$6.52.
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Walter Woo has given his Hold rating due to a combination of factors affecting Cafe de Coral Holdings Ltd. The company’s financial performance for FY25 did not meet expectations, particularly in terms of dividends, and recent sales figures remain under pressure. The industry environment is challenging, with increased travel by Hong Kong residents and rising competition from local dining options, limiting the potential for price increases.
Furthermore, the outlook for FY26 appears subdued despite efforts to boost customer traffic through product diversification and membership promotions. The company’s sales growth may still be constrained by unfavorable market conditions. While there is some potential for margin improvement due to reduced rental expenses, other factors such as increased minimum wages and losses from store closures continue to pose challenges. As a result, the stock’s valuation and yield do not appear sufficiently attractive, justifying the Hold rating.
Woo covers the Consumer Cyclical sector, focusing on stocks such as Li Ning Company, Jiumaojiu International Holdings Ltd., and Yum China Holdings. According to TipRanks, Woo has an average return of 1.3% and a 53.40% success rate on recommended stocks.
In another report released on June 20, Jefferies also maintained a Hold rating on the stock with a HK$6.81 price target.