Yamato released a research report stating that it reaffirmed the “buy” rating of TEP International (01368) and lowered its earnings forecast per share for this year and next two years by 4% to 9%, and the target price to HK$6 based on concerns about overseas market development and weak investment in new brands.
According to the report, the retail sales of TEP's core brands recorded a high year-on-year increase in the number of units in the first quarter, which was better than expected. The positive sales trend continued from mid-March until now, and has achieved a double-digit percentage year-on-year increase even under the higher base last year. Yamato said that management's attitude during the investor conference call became more positive and optimistic, but it is expected that adjustments to the full-year business growth guidelines will not be considered until the interim results are announced.