Citi Research lowered its target price for Lifestyle International Holdings (01212) to HK$9.5 from HK$12.5 and maintained its "buy" rating.
The research house said expects July and August sales to decline by 20% and 50% respectively, and September potential decline to be between July and August.
Citi expects a narrower decline in 4Q versus 3Q assuming slight recover of local consumption. Lacking of tourism consumption contribution, Citi expects 2H sales proceeds to decline by 30%.
Given limited operating expenses (7.6% of sales proceeds), which are assumed all fixed, Citi expects operating profit to decline by 40% in 2H and 20% in 2019 full year. It nudged down its 2019/20/21 core earnings forecasts by 9%/10%/10% to reflect lower sales and EBIT margin forecasts.
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