UBS lowers the target price for SUNART RETAIL to 2.4 yuan, with the first half of the fiscal year's performance and dividend in line with expectations

UBS research report indicates that SUNART RETAIL (06808.HK) experienced a 12% year-on-year decline in revenue for the first half of the 2026 fiscal year, amounting to RMB 30.5 billion, and recorded a net loss of RMB 123 million, compared to a net profit of RMB 206 million in the same period last year. The bank noted that the one-time drag factors for the first half of the fiscal year included a year-on-year decrease in interest income of RMB 84 million, costs related to business optimization in the Central China region, and reduced rental income during store renovations. The company declared an interim dividend of HKD 0.085 per share, with a total dividend payout of RMB 735 million, resulting in a dividend yield of 4.5%, in line with market expectations and management guidance.

Due to competitive pressures, one-time cost burdens, and negative tax impacts, the bank has lowered its earnings per share forecast for SUNART RETAIL for the fiscal years 2026 to 2028 by 14% to 79%; the target price has been reduced from HKD 2.7 to HKD 2.4, with a rating of "Buy."