HK Stock Market Move | SUNART RETAIL (06808) fell more than 3%, short-term profitability still under pressure, confident in sustainable dividend distribution.

SUNART RETAIL (06808) fell more than 3%, falling by 3.13% to HK$1.55 at the time of writing, with a turnover of HK$140.205 million. On the news front, a recent report from UBS maintained a target price of HK$2.15 and a "buy" rating for SUNART RETAIL. The management of SUNART RETAIL stated that although profitability is still under pressure in the short term, with careful capital expenditure, free cash flow will remain healthy, giving them confidence in sustainable dividend distribution. Looking ahead to the 2027 fiscal year, the management plans to distribute dividends equivalent to the level after deducting special dividends from the 2026 fiscal year, totaling 1.5 billion RMB for the year, with a dividend yield of 10%. The management revealed that due to the decline in average selling prices (ASP) and the decrease in quantity of items per order, the group's store channel is facing significant pressure on customer spend, with a double-digit decline in average spending. Overall customer traffic in November remained flat compared to the same period last year, with a 2%-3% decrease in store channel and a 3%-5% increase in online channel, offsetting some of the decline.