[ET Net News Agency, 11 August 2020] Morgan Stanley raised its target price for Sun Art
Retail Group (06808) to HK$15 from HK$13.8 and maintained its "equal-weight" rating.
The research house cut its earnings estimates by 9% for 2021 and 6% for 2022 and left
2020 largely unchanged. Morgan estimated earnings growth of 9%, 5%, and 11% for 2020,
2021, and 2022.
Its estimate changes reflect weaker offline traffic post-COVID-19, weighing on both
offline sales and rental income. Morgan assumed rental income can recover to 2019's level
in 2021 but will grow at just 2% afterward. Morgan likes Sun Art's online grocery story,
but is still unsure regarding its offline traffic and store expansion. (KL)