Daiwa raises Guming target price to HK$36, maintains buy rating

Rating: Daiwa maintains &quot;Buy&quot; rating on Guming (01364.HK).
Price Target: Target price increased to HK$36 from HK$35.
Thesis: Competitor subsidy rollbacks give Guming a key opportunity to consolidate the mid-price tea market.

Daiwa raised its price target for Guming Holdings (01364.HK) to HK$36 from HK$35, maintaining a “Buy” rating on the stock after a recent research report published on April 13.

"The rollback of subsidies provides Guming with a golden opportunity to consolidate the mid-priced market, as its franchisees' take-home pay and profitability are expected to be better than peers," Daiwa's report stated.

The investment bank noted that subsidies from competitors like Meituan and JD.com have returned to pre-price war levels. In response to investor concerns about sales volume, Guming's management pointed to store model renovations, incremental coffee sales, and extended operating hours as drivers for stable sales growth in 2026. Daiwa has increased its earnings per share forecast for Guming for the years 2026 to 2028 by 6% to 12%.

Guming's management expects the proportion of its delivery orders, which peaked at 60% in the third quarter of last year, to continue to decline from its current level of below 50%. The company aims to boost franchisee profitability by promoting in-store dining, extending morning hours, and increasing coffee sales.

The updated forecast suggests Daiwa sees a clear path to improved profitability for Guming's store operators. Investors will be watching the company's next earnings release to see if the strategy translates to higher margins and market share gains.

This article is for informational purposes only and does not constitute investment advice.