CAFE DE CORAL H(HK:00341) Zhi Tong Cai Jing·2026-01-14 07:18Core Viewpoint - The report from Jefferies indicates a significant downward revision of the profit forecasts for Café de Coral (00341) for the fiscal years 2026 to 2028, with net profit estimates reduced by 52%, 51%, and 44% respectively, due to lower-than-expected improvements in profit margins [1] Group 1: Financial Performance - The company reported a 68% year-on-year decline in net profit to HKD 47 million for the first half of the fiscal year ending September 2026, which was below both Jefferies' and management's expectations [1] - Sales revenue decreased by 5% to HKD 4 billion during the same period, and adjusted EBITDA fell by 29% after excluding fair value losses and impairments from investment properties [1] Group 2: Market Conditions - The weak performance is attributed to increased market competition in the Hong Kong fast-food sector and the impact of consumers traveling to mainland China and abroad [1] Group 3: Dividend and Management Confidence - The company declared an interim dividend of HKD 0.1 per share, with a payout ratio of 122%, reflecting a strong cash position and management's confidence in improving operational conditions for the second half of the fiscal year ending March 2026 and beyond [1] Group 4: Target Price and Rating - Jefferies has lowered the target price for Café de Coral from HKD 6.81 to HKD 5.15, a reduction of 24%, while maintaining a "Hold" rating, indicating limited upside potential for the company's fast-food business transformation in Hong Kong [1]