UBS raises YUE YUEN IND target price to HKD 20.3, retail sales decline narrowed in the second half of last year

UBS published a research report indicating that Yue Yuen (00551.HK) management revealed that in an environment of fluctuating demand, OEM customers maintain a cautious ordering attitude, continuing to push demand for the first quarter of 2026 to orders placed in the fourth quarter of 2025. However, it is expected to benefit from product mix upgrades, estimating that the average selling price of products in the fourth quarter of 2025 could achieve year-on-year growth. For the entire last year, a low single-digit year-on-year increase is anticipated, but some of the increase may be offset by shared tariff costs with customers.

The bank also stated that the decline in retail sales for Yue Yuen in the second half of last year is expected to narrow compared to the first half, with online sales performing better than offline. Inventory levels remain healthy, and discounts in the fourth quarter have improved compared to the first three quarters. The company's target price has been raised from HKD 18.4 to HKD 20.3, with a rating of "Buy."