Daily Brief China: Taste Gourmet, Eternal Beauty Holdings Limited, New World Development and more

• Taste Gourmet (8371 HK) will report its H1 FY25 earnings in early November. The company isn’t reporting quarterly earnings because GEM board stocks are no longer required to do so. 
• We expect revenue and profit growth of 22% %/20% YoY, as the average number of HK restaurants has increased from 45 to 54, and most have ramped up. 
• Trading at 4.5x PE with a 12% dividend yield, 27% of the market cap in cash and a mainboard listing on the horizon there abundant catalysts for the future. 

• The essence of Eternal Beauty’s business model is to earn a “price difference” of the brand and product portfolios, but this business model is difficult to generate high profit margins.
• The situation and prospects of China’s perfume market are facing major changes. It‘s uncertain whether the perfume sales in the China market can maintain double-digit growth in the long term.
• Eternal Beauty’s financial performance would face challenges due to changes in consumer preferences, shifts in China’s domestic policies, international trade disputes, geopolitical conflicts, etc. Valuation could be lower than peers.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• New World Development