Lyon: Maintaining Gangnam's (03306) “Outperform the Market” rating, target price of HK$25

The Zhitong Finance App learned that Lyon released a research report saying that Jiangnan Puyi (03306)'s revenue and net profit for the 2026 fiscal year ended the end of June reached 6 billion yuan and 1 billion yuan respectively, in line with the bank's expectations and superior to management guidelines; the bank maintained a “outperforming the market” rating and target price of HK$25, and raised the sales forecast for the 2027-2028 fiscal year by 2% to 4%.

The Company's annual dividend of HK$2.33 per share included a special dividend of HK75 cents to celebrate the 10th anniversary of listing, which led to an annual dividend rate of approximately 12%. The bank added that online performance was superior to offline, with same-store sales rising 2.4% year over year as a highlight; brand LESS increased 17% year over year, better than core brand JNBY's 7.6%. Management aims to maintain year-on-year revenue and net profit growth in the 2027 fiscal year. The bank predicts 8% and 9% year-on-year increases, respectively. Looking ahead to the next decade, management hopes to turn Jiangnan cloth into an evergreen brand with global influence.

The bank raised its sales forecast by 2% to 4% for the 2027-2028 fiscal year to reflect sales resilience brought about by multi-brand portfolios and member retention and expansion; considering resilient basic needs, strong execution, excellent shareholder returns, and low valuation, it is regarded as one of China's preferred stocks.