UBS raises YUE YUEN IND target price to 18 yuan, optimistic about fourth-quarter retail sales trend

AASTOCKS
2025.11.17 07:03

UBS research report indicates that Yue Yuen Industrial Holdings Limited (00551.HK) reported third-quarter revenue and net profit of USD 1.957 billion and USD 108 million, respectively, representing year-on-year declines of 5% and 27%. Retail business revenue grew by 6% year-on-year to RMB 3.743 billion, with a net loss of RMB 17 million. Original Equipment Manufacturer (OEM) revenue and net profit were USD 1.434 billion and USD 109 million, respectively, exceeding the bank's expectations by 62%, primarily due to a higher-than-expected gross margin.

Based on the discounted cash flow (DCF) method, UBS raised its target price for Yue Yuen from HKD 16 to HKD 18, as UBS increased its net profit forecasts for 2025 to 2027 by 5% to 6% to reflect better-than-expected gross margins in the OEM business; rating "Buy."

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