CMB International Securities analyst Walter Woo maintained a Buy rating on JNBY Design (JNBYF – Research Report) on February 28 and set a price target of HK$18.68.
Walter Woo has given his Buy rating due to a combination of factors that suggest JNBY Design is poised for growth despite current challenges. The company’s retail sales trend has been muted due to a weak macroeconomic environment and an unusually warm winter, but there has been a positive shift in sentiment following government stimulus and increased e-commerce efforts. This has led to a slight improvement in retail sales growth entering early 2025.
Moreover, JNBY Design’s management remains confident in achieving their FY25E guidance, which includes positive sales and net profit growth. This confidence is supported by several strategic initiatives, such as accelerating store expansion, maintaining strong e-commerce sales momentum, and enhancing customer experience through improved member benefits. Additionally, the acquisition of B1OCK is expected to contribute to growth. Despite increased marketing expenses, the company anticipates stable gross profit margins due to reduced retail discounts and an improved sales mix. Overall, these factors contribute to a forecasted 5% sales growth and 6% net profit growth for FY25E, justifying the Buy rating.
Woo covers the Consumer Cyclical sector, focusing on stocks such as Yum China Holdings, Luckin Coffee, and ANTA Sports Products. According to TipRanks, Woo has an average return of 2.0% and a 53.49% success rate on recommended stocks.