Citi released a research report saying that after announcing the results for the first half of 2025, Lukfook Group (00590) lowered its sales and profit margin forecasts. As a result, the target price was lowered by 23.4%, from HK$22.2 to HK$17, but maintained a “buy” rating.
Citibank analysts pointed out that Lukfook's mid-term net profit fell 56% in line with previous announcements. Management expected that the Group's sales and profit margin performance in the second half of 2025 would improve as the sales season began and the base base was low, and the rate of store closures in mainland China would slow down. Citi believes that Lukfook's current valuation is attractive. It predicts a price-earnings ratio of 9 times and a dividend yield of 7.4%, so it maintains the purchase.
The bank pointed out that compared with Chow Tai ?$#@$, Lukfook's sales trend in mainland China is weak, while the performance in Hong Kong, Macau and overseas markets is similar. The bank lowered Lukfook's net profit forecast for the 2025-2027 fiscal year by 27%-35% to reflect lower sales and profit margin forecasts.
