On Monday, Citi adjusted its stock price target for Sun Art Retail Group (OTC:SURRY) Limited (6808:HK) (OTC: SURRF), setting a new target of HK$1.75, a decrease from the previous HK$3.15. Despite the reduced price target, the firm continues to recommend a Buy rating for the stock.
Citi's outlook for Sun Art Retail reflects an anticipated strategic pivot towards emphasizing product value, same-store sales growth (SSSG), and an increase in gross profit dollars. The company's management has set goals for the full fiscal year ending March 2025, aiming for "positive SSSG," in contrast to Citi's forecast of a 1% increase.
Moreover, Sun Art expects year-over-year rental income to remain relatively unchanged and projects a "positive net profit," which differs from Citi's estimate of Rmb356 million.
Following what is considered a transition year in FY25, Citi anticipates a more significant recovery in Sun Art's net profit by the fiscal year ending in March 2026, projecting it to reach Rmb673 million. The firm's decision to maintain a Buy rating is informed by the current market sentiment, which has considerably lowered earnings expectations for Sun Art Retail.
Citi's commentary suggests that while there is a downward revision in the price target, the firm's outlook remains positive based on the company's long-term financial targets and strategic initiatives.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.