According to BOC International's expectations, after Luk Fook's acquisition of King's 658, although the group's profitability in FY2025 and the future is under pressure, it can still provide a considerable dividend yield (about 7%).
According to the research report released by BOC International, it maintains a "buy" rating on Luk Fook Holdings (00590) and expects that after Luk Fook acquires King's 658, although the group's profitability in FY2025 and the future is under pressure, it can still provide a considerable dividend yield (about 7%). However, the target price has been lowered from HKD 29.1 to HKD 21.8.
The report states that Luk Fook Holdings' net profit for FY2024 increased by 38% year-on-year to CNY 1.77 billion, but it was still 7% lower than the bank's expectations, as suppressed demand began to recede since March this year. The related momentum continued in the first quarter of FY2025, and same-store sales in Hong Kong, Macau, and Mainland China from April 1 to June 21 fell by 35% and 20% year-on-year, respectively. However, it is estimated that the momentum will improve in the second half of FY2025, due to the impact of central banks beginning to cut interest rates and rising gold prices in various countries.