Jiumaojiu International Holdings Ltd. (9922 – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst yesterday. Analyst Walter Woo from CMB International Securities maintained a Hold rating on the stock and has a HK$2.56 price target.
Walter Woo has given his Hold rating due to a combination of factors influencing Jiumaojiu International Holdings Ltd. While there is optimism about the company’s ongoing reforms, which include improving product quality and focusing on core regions, there are concerns about the company’s financial performance in the near term. The company is undergoing a series of transformations aimed at optimizing its corporate structure, enhancing digitalization, and refining store formats across its brands.
Despite these positive initiatives, Woo remains cautious about the company’s margins in FY25. The expected low margins are attributed to stagnant same-store sales growth and potential impairments from store closures. The financial outlook is further impacted by a conservative view on seat turnover and the anticipated level of store closures. Consequently, the stock’s valuation at 17x FY26E P/E is not seen as attractive, leading to the Hold recommendation.
In another report released yesterday, Macquarie also maintained a Hold rating on the stock with a HK$2.90 price target.