Core Viewpoint - The report from CMB International indicates a downward adjustment of the target price for Baoshan International (03813) to HKD 0.74 while maintaining a "Buy" rating, citing that the current stock price reflects performance pressures and an expected dividend yield of over 8% provides sufficient downside protection [1] Company Summary - The short-term outlook for the company suggests continued intense industry competition, with potential ongoing pressure on discounts in the second half of the year [1] - Revenue forecasts for the company for 2025-2027 have been reduced by 7%-8% to RMB 17.3-18.9 billion, with anticipated revenue for the second half of 2025 expected to remain in a declining range, showing a year-on-year decrease of 4.5% [1] - Net profit forecasts for the next three years have been lowered by 6%-24% to RMB 410-600 million, reflecting the impact of negative operating leverage [1] Industry Summary - For the first half of 2025, Baoshan International's performance continued to decline, with Q2 showing some positive signals: the company achieved revenue and net profit attributable to shareholders of RMB 9.16 billion and RMB 190 million, respectively, representing year-on-year declines of 8.3% and 44.1%, primarily due to reduced foot traffic in physical stores, with same-store sales down by 10%-20% [1] - The gross margin decreased by 0.7 percentage points to 33.5%, while the operating profit margin fell by 1.7 percentage points to 3.1% [1] - Despite short-term performance pressures, the report highlights positive operational signals emerging in Q2, laying the groundwork for future recovery: discount levels improved slightly compared to Q1, leading to a seasonal recovery in gross margin, and inventory levels also showed a quarter-on-quarter improvement, indicating operational resilience [1]
交银国际：下调宝胜国际目标价至0.74港元 维持“买入”评级