Lyon: Lowering the target price of Special Step International (01368) to HK$5.1, and annual sales and net profit forecasts of 6% each

The Zhitong Finance App learned that Lyon released a research report saying that the target price for TEP International (01368) was lowered from HK$5.5 to HK$5.1, but the bank believes that market sentiment is likely to have bottomed out due to the reduction in guidelines. Maintaining a “outperforming the market” rating, the stock is not expensive to value.

The stock price of Teb International rose 6% after announcing the results for the first half of 2026 on August 25 (yesterday), benefiting from net profit and attractive risk returns for the first half of the year, which were better than market concerns. Faced with the complex retail environment, Special Step lowered its sales guidelines for the full year of 2026 to a lower number of units compared to the year-on-year decline. The old guidelines were the number of units rising year-on-year, and maintained the net profit margin guide to a high number of units. The bank expects a 2% and 14% year-on-year decrease in sales/net profit for the full year of 2026, with a net profit margin of 8.5%. Gross margin should remain steady, while operating expenses continue to face pressure related to direct management. Short-term adjustments caused the bank to lower its 2026 sales/net profit forecast by 6%.