Haitong International Begins Coverage of LUK FOOK HOLD (00590.HK) with Outperform Rating and Target Price of $40.35
Research Coverage Initiation: Haitong International has initiated coverage on LUK FOOK HOLD (00590.HK) with an "Outperform" rating, forecasting net profits of $1.578 billion, $1.8 billion, and $1.977 billion for FY2026-2028.
Valuation and Target Price: The broker assigned a 15x PE ratio for FY2026, resulting in a target price of $40.35 based on comparable company valuations.
Financial Performance: LUK FOOK HOLD reported a revenue of $6.843 billion for 1HFY2026, a 25.6% increase YoY, with gross profit rising 33.2% YoY to $2.373 billion and a gross profit margin of 34.7%.
Profit Metrics: The company achieved an operating profit of $780 million (up 45.4% YoY) and a net profit of $619 million (up 42.5% YoY), with an interim DPS of $0.55, reflecting a payout ratio of 52%.
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HSI Drops 484 Points at Midday Amid Weakness in Chinese Insurers and Commodity Stocks; AI Large Model Stocks Surge
Market Performance: The HSI dropped 484 points (1.8%) to 26,547, with significant declines in financial stocks like HSBC and HKEX, while total half-day turnover reached $128.406 billion.
Chinese Inflation: China's inflation rate for January was reported at 0.2%, lower than the previous 0.8% and below the forecast of 0.4%.
Gold Prices Decline: Gold prices fell below $5,000 per ounce, negatively impacting several gold-related stocks, which saw declines ranging from 3.6% to 5.2%.
AI Stocks Surge: AI-related stocks experienced significant gains, with MINIMAX-WP rising 9.4% and KNOWLEDGE ATLAS surging 11.9% following the launch of new programming models.
<Research>DBS: LUK FOOK HOLD Kicks Off 2026 Strongly; Target Price Increased to HKD36.74
Strong Sales Performance: LUK FOOK HOLD has started 2026 positively, with strong sales in Hong Kong and Macau driven by increased consumption from Chinese tourists and a favorable base.
Optimistic Outlook: The company's management is optimistic about the gross profit margin reaching a new high in the second half of 2026, supported by good performance in gold jewelry consumption.
Analyst Rating: DBS Research has given LUK FOOK HOLD a Buy rating and raised its target price from HKD33.87 to HKD36.74, reflecting confidence in the company's growth.
Market Conditions: Despite uncertainties in gold prices and market volatility, demand for LUK FOOK HOLD's products remains healthy, indicating resilience in the market.
Jewelry and Gold Mining Stocks Soar as Gold and Silver Prices Reach Record Highs; LAOPU GOLD Jumps 14% to Six-Month Peak
Gold and Silver Prices Surge: Gold futures in New York reached a historic high of USD5,080.1 per ounce, while silver futures peaked at USD107.925, reflecting significant increases in precious metal prices.
Jewelry Stocks Performance: Hong Kong-listed jewelry stocks, particularly LAOPU GOLD, experienced substantial gains, with expectations of strong sales during the Spring Festival due to high gold prices and promotional activities.
Gold Miners Thrive: Gold mining companies like ZIJIN MINING and ZHAOJIN MINING saw their stock prices rise significantly, benefiting from the increasing gold prices and high trading volumes.
Short Selling Activity: Various stocks in the jewelry and mining sectors showed notable short selling ratios, indicating a mix of investor sentiment and market speculation amidst the rising prices of gold and silver.
Jewelry and Gold Stocks Perform Well; LAOPU GOLD Rises Approximately 7%; LUK FOOK HOLD Reaches 7.5-Year High; CHOW TAI FOOK Remains Weak
Gold and Silver Prices Surge: Gold prices are nearing US$5,000 per ounce, with spot gold last quoted at US$4,944.08, while spot silver reached US$98.64 per ounce, reflecting significant increases in both metals.
Impact on Jewelry Stocks: The rise in gold prices has led to increased market expectations for gold product prices, positively affecting jewelry stocks in Hong Kong, particularly LAOPU GOLD, which saw a notable increase in its share price.
NWD Allegedly Experiencing Large Tenant Departures at 11 SKIES; Airport Authority Engaging with Alternative Developers for Collaboration
Tenant Terminations at 11 SKIES: Numerous tenants, including Chow Tai Fook, Uniqlo, and LUK FOOK HOLD, have terminated their leases at the 11 SKIES mall near Hong Kong International Airport, amid significant short selling activity.
Impact of Terminal 2 Delays: Delays in the construction of the airport's Terminal 2 are expected to postpone the opening of 11 SKIES to at least mid-year, further affecting its prospects.
NWD's Response: New World Development (NWD) has not commented on the tenant terminations, while the Airport Authority Hong Kong is considering alternative operational arrangements with other developers.
Market Activity: The short selling ratios for Chow Tai Fook and other associated companies indicate a lack of confidence in their performance, with Chow Tai Fook experiencing a short selling ratio of 47.384%.
Citi Research: CHOW TAI FOOK Anticipates Fixed-price Gold Products to Account for 33-35% of Sales This Year
Chow Tai Fook's Performance: The company achieved same-store sales growth (SSSG) in Q3 FY26, aligning with broker expectations, while management anticipates low to mid-single-digit SSSG during the Lunar New Year period.
Gold Price Impact: Chow Tai Fook's gross margin target is considered conservative, based on a gold price of USD 4,500/oz, which is 7% lower than the current market price, potentially affecting sales of weight-based gold products.
Sales Strategy: Fixed-price gold products are expected to contribute 33-35% of the group's sales this year, with plans to increase this proportion to 35-40% over the next three years.
Broker Ratings: Citi maintains a Buy rating for Chow Tai Fook with a target price of HKD 18.2, while also adjusting earnings forecasts to exceed the company's guidance.
HSI Drops 484 Points at Midday Amid Weakness in Chinese Insurers and Commodity Stocks; AI Large Model Stocks Surge
Market Performance: The HSI dropped 484 points (1.8%) to 26,547, with significant declines in financial stocks like HSBC and HKEX, while total half-day turnover reached $128.406 billion.
Chinese Inflation: China's inflation rate for January was reported at 0.2%, lower than the previous 0.8% and below the forecast of 0.4%.
Gold Prices Decline: Gold prices fell below $5,000 per ounce, negatively impacting several gold-related stocks, which saw declines ranging from 3.6% to 5.2%.
AI Stocks Surge: AI-related stocks experienced significant gains, with MINIMAX-WP rising 9.4% and KNOWLEDGE ATLAS surging 11.9% following the launch of new programming models.
<Research>DBS: LUK FOOK HOLD Kicks Off 2026 Strongly; Target Price Increased to HKD36.74
Strong Sales Performance: LUK FOOK HOLD has started 2026 positively, with strong sales in Hong Kong and Macau driven by increased consumption from Chinese tourists and a favorable base.
Optimistic Outlook: The company's management is optimistic about the gross profit margin reaching a new high in the second half of 2026, supported by good performance in gold jewelry consumption.
Analyst Rating: DBS Research has given LUK FOOK HOLD a Buy rating and raised its target price from HKD33.87 to HKD36.74, reflecting confidence in the company's growth.
Market Conditions: Despite uncertainties in gold prices and market volatility, demand for LUK FOOK HOLD's products remains healthy, indicating resilience in the market.
Jewelry and Gold Mining Stocks Soar as Gold and Silver Prices Reach Record Highs; LAOPU GOLD Jumps 14% to Six-Month Peak
Gold and Silver Prices Surge: Gold futures in New York reached a historic high of USD5,080.1 per ounce, while silver futures peaked at USD107.925, reflecting significant increases in precious metal prices.
Jewelry Stocks Performance: Hong Kong-listed jewelry stocks, particularly LAOPU GOLD, experienced substantial gains, with expectations of strong sales during the Spring Festival due to high gold prices and promotional activities.
Gold Miners Thrive: Gold mining companies like ZIJIN MINING and ZHAOJIN MINING saw their stock prices rise significantly, benefiting from the increasing gold prices and high trading volumes.
Short Selling Activity: Various stocks in the jewelry and mining sectors showed notable short selling ratios, indicating a mix of investor sentiment and market speculation amidst the rising prices of gold and silver.
Jewelry and Gold Stocks Perform Well; LAOPU GOLD Rises Approximately 7%; LUK FOOK HOLD Reaches 7.5-Year High; CHOW TAI FOOK Remains Weak
Gold and Silver Prices Surge: Gold prices are nearing US$5,000 per ounce, with spot gold last quoted at US$4,944.08, while spot silver reached US$98.64 per ounce, reflecting significant increases in both metals.
Impact on Jewelry Stocks: The rise in gold prices has led to increased market expectations for gold product prices, positively affecting jewelry stocks in Hong Kong, particularly LAOPU GOLD, which saw a notable increase in its share price.
NWD Allegedly Experiencing Large Tenant Departures at 11 SKIES; Airport Authority Engaging with Alternative Developers for Collaboration
Tenant Terminations at 11 SKIES: Numerous tenants, including Chow Tai Fook, Uniqlo, and LUK FOOK HOLD, have terminated their leases at the 11 SKIES mall near Hong Kong International Airport, amid significant short selling activity.
Impact of Terminal 2 Delays: Delays in the construction of the airport's Terminal 2 are expected to postpone the opening of 11 SKIES to at least mid-year, further affecting its prospects.
NWD's Response: New World Development (NWD) has not commented on the tenant terminations, while the Airport Authority Hong Kong is considering alternative operational arrangements with other developers.
Market Activity: The short selling ratios for Chow Tai Fook and other associated companies indicate a lack of confidence in their performance, with Chow Tai Fook experiencing a short selling ratio of 47.384%.
Citi Research: CHOW TAI FOOK Anticipates Fixed-price Gold Products to Account for 33-35% of Sales This Year
Chow Tai Fook's Performance: The company achieved same-store sales growth (SSSG) in Q3 FY26, aligning with broker expectations, while management anticipates low to mid-single-digit SSSG during the Lunar New Year period.
Gold Price Impact: Chow Tai Fook's gross margin target is considered conservative, based on a gold price of USD 4,500/oz, which is 7% lower than the current market price, potentially affecting sales of weight-based gold products.
Sales Strategy: Fixed-price gold products are expected to contribute 33-35% of the group's sales this year, with plans to increase this proportion to 35-40% over the next three years.
Broker Ratings: Citi maintains a Buy rating for Chow Tai Fook with a target price of HKD 18.2, while also adjusting earnings forecasts to exceed the company's guidance.
