How are energy investors positioned?
On Friday, UBS analysts downgraded Mixue Group (2097:HK) stock from Neutral to Sell. The decision was influenced by concerns over the company’s valuation and slower-than-expected recovery in its overseas markets.
The analysts set a new price target for Mixue Group at HK$477.13, up from the previous target of HK$435.59. They noted that while Mixue’s domestic business continues to show strong growth due to its robust supply chain and franchise model, its international operations are facing challenges from increasing competition.
Mixue Group’s stock is currently trading at a price-to-earnings ratio of 43x for 2025 and 36x for 2026, with a price-to-earnings growth ratio of 2.2x. This is compared to the 1.9x average for Chinese new consumer peers, leading the analysts to believe that the stock’s current valuation has already accounted for its long-term overseas growth potential.
UBS analysts also highlighted that their earnings estimates for Mixue Group from 2025 to 2027 are 5-8% below consensus. The downgrade reflects concerns over the company’s ability to maintain its growth momentum amid rising international competition.
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