SUNART RETAIL (06808) Falls Over 3% in Hong Kong Trading; Near-Term Profitability Under Pressure, Management Confident in Sustainable Dividends

Stock News01-16

SUNART RETAIL (06808) fell more than 3%, declining 3.13% to HK$1.55 at the time of writing, with a turnover of HK$14.0205 million. A recent UBS research report maintained a target price of HK$2.15 and a "Buy" rating for SUNART RETAIL. Management stated that although profitability remains under pressure in the short term, prudent capital expenditure will keep free cash flow healthy, providing confidence in sustainable dividend payments. Looking ahead to fiscal year 2027, management plans to distribute dividends equivalent to the level of fiscal 2026 after excluding special dividends, amounting to a full-year payout of RMB 1.5 billion, representing a dividend yield of 10%. Management revealed that the average transaction value per customer across the group's store channels is under significant pressure, with a double-digit decline, impacted by lower average selling prices (ASP) and a decrease in the number of items per order. Overall customer traffic in November was flat compared to the same period last year, with store channels declining 2%-3% and online channels growing 3%-5%, partially offsetting the decline.

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