UBS: Raises GUMING (01364) target price to HK$35.7, last year's performance exceeds expectations.

UBS released a research report stating that GUMING (01364) saw a 47% year-on-year increase in revenue and a 110% increase in net profit last year, reaching 12.914 billion RMB and 3.109 billion RMB, higher than the market expectations. The gross profit margin during the period expanded by 2.4 percentage points to 33% year-on-year, driven by economies of scale, partially offset by the increase in equipment sales. The bank maintained a "buy" rating for GUMING, with a target price raised from 31.15 Hong Kong dollars to 35.7 Hong Kong dollars. Looking ahead to 2026, the management expects the net increase in the number of stores to be roughly the same as in 2025, while focusing more on relocating poorly performing stores and renovating existing ones. In addition, the management is confident in maintaining healthy same-store sales growth, with double-digit year-on-year growth recorded in the first quarter of this year. The management also hopes to maintain long-term stability in gross profit margins while prioritizing safeguarding the profits of franchisees.