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Investing.com - Goldman Sachs upgraded Jiumaojiu International Holdings Ltd (HK:9922) from Neutral to Buy and raised its price target to HK$3.80 from HK$3.20, citing emerging recovery signs.
The Hong Kong-listed restaurant operator’s shares have declined 16% year-to-date, underperforming the HSCEI’s 24% gain, but Goldman Sachs sees an inflection point approaching due to aggressive store closures, cost control measures, and solid performance from new store formats under the Tai Er brand.
While Jiumaojiu still faces same-store sales growth headwinds in the first half of 2025, the investment bank expects an easier comparison base in the second half, particularly in the fourth quarter, with the flagship Tai Er brand showing improvement.
Goldman Sachs highlighted three positive factors: the rollout of new format stores (currently 57 versus targets of 70 by July and 100-150 by year-end 2025), the closure of 68 underperforming stores with negative cash flow in the first half of 2025, and narrowing same-store sales declines for Tai Er throughout the second quarter.
The firm also noted Jiumaojiu’s recently approved HK$200 million share buyback program, which could provide support against short-term downside risk, with the new price target implying 32% upside potential.
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