Gu Ming Profit Doubles, Prompting UBS Target Hike to HKD35.7

Edgen Stock

·Mar 27 2026, 07:47

Share to

Share to

Copy link

Key Takeaways

GU MING (01364.HK) delivered annual results that significantly beat market expectations, headlined by a 110% increase in net profit. The strong performance, driven by economies of scale and margin expansion, prompted UBS to reaffirm its confidence in the company by raising its price target and maintaining a 'Buy' rating.

Exceptional Profit Growth: Net profit surged 110% year-over-year to RMB3.109 billion, while revenue climbed 47% to RMB12.914 billion.
Upgraded Analyst Outlook: UBS lifted its target price on GU MING stock to HKD35.7 from a previous HKD31.15, signaling increased conviction.
Margin Expansion: The company's gross profit margin widened by 2.4 percentage points to 33%, showcasing improved operational efficiency despite a higher mix of equipment sales.

Gu Ming Net Profit More Than Doubles to RMB3.1 Billion

GU MING (01364.HK) reported standout annual financial results that surpassed analyst forecasts, with net profit growing 110% year-over-year to RMB3.109 billion. Full-year revenue reached RMB12.914 billion, a 47% increase from the prior year. The company's profitability was further highlighted by an expansion in its gross profit margin, which climbed 2.4 percentage points to 33%. Management attributed this improvement to achieving greater economies of scale, a gain that was partially offset by an increased proportion of lower-margin equipment sales within its revenue mix.

UBS Lifts Target Price to HKD35.7 on Confident Outlook

In response to the strong earnings report, UBS reiterated its "Buy" rating for GU MING and raised its target price to HKD35.7 from HKD31.15. The bank's upgraded valuation reflects confidence in the company's growth trajectory and sustained profitability. Management stated that the net increase in stores for 2026 is expected to mirror the 2025 level, with an enhanced focus on optimizing the store network through relocations and renovations. Despite a reduction in delivery subsidies, the company recorded double-digit same-store sales growth in the first quarter of 2026. Looking ahead, management aims to maintain stable long-term gross margins while prioritizing the profitability of its franchisees. The company also announced a final dividend of HKD0.50.