Shares of CHINA RES MIXC (HKEX: 01209) rose more than 4% during the morning session. At the time of writing, the stock was up 3.87%, trading at HK$42.98 with a turnover of HK$727.92 million.
Morgan Stanley's Bullish Stance and Price Target
Morgan Stanley has released a research report expressing a high degree of confidence that the share price of CHINA RES MIXC will rise over the next 30 days, estimating the probability of this occurring at over 80%. This view is primarily based on the stock's significant recent pullback, which has made its short-term valuation substantially more attractive. The firm has assigned an Overweight rating and set a target price of HK$55.47.
Addressing Market Concerns and Growth Outlook
The report suggests that market concerns over a potential slowdown in the company's same-store sales growth may be excessive. These concerns stem from weaker sales in luxury goods and gold in recent months. Morgan Stanley believes CHINA RES MIXC is relatively insulated from this trend because it has significantly increased its exposure to mid-to-low-end consumption and expanded its presence in second-tier and top-tier third-tier cities over the past few years. The firm expects the company to still achieve its guidance for high single-digit same-store sales growth, estimating growth in May to be in the mid-single digits compared to the approximately 10% year-on-year growth seen in the first four months. Furthermore, Morgan Stanley forecasts earnings per share growth of around 11% to 14% for the year, driven by continued market share gains, the opening of new shopping malls, and margin expansion resulting from operating leverage.
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