vested
G Sachs Finds LUK FOOK's 2HFY23 NP Miss, Says Mgmt Conservative on CN Biz RecoveryGoldman Sachs released a research report on LUK FOOK HOLD (00590.HK), which announced its annual results for the year ended March this year, with weaker overall gross margins due to a higher proportion of gold products and weaker than expected net profit for the second half of FY23.
The group revealed that same-store sales growth in the mainland from April to June 21 was flat YoY, in line with Goldman Sachs forecasts, while franchise performance was about 2% higher than before the pandemic.
Goldman noted that LUK FOOK's performance was worse than its peer CHOW TAI FOOK (01929.HK), whose same-store sales in April-May were about 6% higher than the that of the same period before the pandemic.
The broker also expected industry sales to weaken in June.
Goldman noted that LUK FOOK management has become more conservative in its view of the recovery of the mainland market this year, and its expansion plan has been lowered to 350 points of sale from the previous 500.
However, Goldman Sachs maintained its Buy rating on LUK FOOK, which is higher than its Neutral rating on CHOW TAI FOOK, pointing out that LUK FOOK's Hong Kong and Macau business contributes more and has a higher short-term recovery visibility and more attractive valuation.
It expected a dividend return of 6% from LUK FOOK for FY24 to FY25 and gave it a target price of $29.4.
Source: AAStocks Financial News
http://www.aastocks.com/en/stocks/news/ ... -news/AAFN
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