UBS lowers the target price for SF Holding to 39 yuan, maintaining a "Neutral" rating

UBS published a research report indicating that SF Holding (06936.HK) had a net profit of RMB 2.8 billion in the fourth quarter of last year, a year-on-year increase of 10%, which is 10 percentage points higher than market expectations. The company raised the upper limit of its A-share repurchase plan from RMB 3 billion to RMB 6 billion, with this year's quota set at RMB 4.5 billion, while also initiating a HKD 500 million H-share repurchase plan. If the entire repurchase quota is utilized, assuming a dividend payout ratio of 40%, the total shareholder return this year is expected to reach as high as 80%, compared to 55% last year, equivalent to a dividend yield of approximately 5%.

UBS slightly adjusted its profit forecast for SF Holding, expecting a revenue growth of 10% this year, a reported net profit margin of 3.6%, and a 19% increase in recurring net profit. The target price was lowered from HKD 41.1 to HKD 39, maintaining a "Neutral" rating