Core Viewpoint - Dongwu Securities has initiated coverage on Luk Fook Holdings (00590), a leading jewelry retailer in Hong Kong and mainland China, with a "Buy" rating following its successful acquisition of a controlling stake in King Fook International Holdings in 2024, enhancing its multi-brand portfolio [1] Group 1: Financial Performance - As of FY2025, Luk Fook achieved revenue of HKD 13.34 billion, reflecting a year-on-year decline of 13.0%, and a net profit attributable to shareholders of HKD 1.1 billion, down 37.8% year-on-year [2] - The company reported inventory levels for gold and platinum/price jewelry at HKD 5.46 billion and HKD 5.28 billion, respectively, with increases of 22.9% and 3.0% year-on-year, benefiting from rising gold prices [2] Group 2: Revenue Breakdown - In FY2025, revenue from retail, wholesale, and brand businesses was HKD 11.03 billion, HKD 1.41 billion, and HKD 0.90 billion, showing declines of 13.5%, 8.8%, and 12.6% year-on-year, with respective contributions of 82.7%, 10.5%, and 6.8% to total revenue [3] - Revenue from mainland China and Hong Kong/Macau accounted for 39.5% and 60.5% of total revenue, with respective year-on-year changes of -0.2% and -19.6% [3] Group 3: Brand Strategy - Luk Fook has established a comprehensive multi-brand matrix, including Luk Fook Jewelry, King Fook, and others, catering to diverse consumer needs across various segments [4] - The core brand, Luk Fook Jewelry, had 2,805 stores globally by the end of FY2025, with a new product line "Ice·Diamond Light Shadow Gold" launched in November 2024, utilizing CNC color technology [4] Group 4: Expansion Plans - As of March 2025, Luk Fook operates 3,287 stores across 11 countries and regions, with plans to enter three new countries and add 50 overseas stores over the next three years [5] - The company is focusing on expanding its presence in mainland China through various store styles and enhancing e-commerce sales via celebrity collaborations and IP partnerships [5] Group 5: Profit Forecast - The company is expected to see a steady recovery in performance from FY2026 onwards, with projected net profits of HKD 1.52 billion, HKD 1.73 billion, and HKD 1.93 billion for FY2026 to FY2028, representing year-on-year growth of 39%, 13%, and 12% respectively [6] - The latest closing price corresponds to a price-to-earnings ratio of 10x, 9x, and 8x for FY2026 to FY2028 [6]

Macro Strategy - The report highlights a shift in policy focus from "preventing and mitigating risks in key areas and external shocks" to "better coordinating domestic economic work and international economic struggles," indicating a more proactive approach to external economic conditions [1][16] - There is a transition from stabilizing asset prices to stabilizing microeconomic entities, emphasizing the importance of employment, enterprises, markets, and expectations over real estate and stock markets [2][16] - The policy language has evolved from "extraordinary counter-cyclical adjustments" to "increasing counter-cyclical and cross-cyclical adjustment efforts," reflecting a balance between short-term stimulus and long-term economic structure considerations [2][16] Economic Indicators - The report anticipates a continued decline in the growth rate of social financing in November, while export growth is expected to turn positive [3][17] - The ECI supply index is reported at 49.93%, indicating a slight decline, while the demand index is at 49.87%, showing a marginal increase [17] - The report notes that the financing demand remains low, with expectations for November's new loans to be between 450 billion to 500 billion RMB, reflecting a year-on-year decrease [17] Industry Insights - The semiconductor industry is expected to see structural opportunities driven by the explosion of AI computing power and accelerated domestic production [11] - In the electronics sector, the demand for AI-driven OS agents is anticipated to lead to a smartphone replacement wave, with AR glasses expected to see significant market entry in 2026 [11] - The report emphasizes the importance of domestic enterprises in the storage sector, which are benefiting from increased procurement by cloud service providers, leading to a "super cycle" in pricing [11] Investment Recommendations - The report suggests a balanced and proactive ETF allocation strategy in the A-share market, anticipating a period of range-bound trading with potential for sector rotation [7] - Specific recommendations include focusing on companies in the engineering machinery sector that have high export profitability, as well as those in the semiconductor and AI equipment sectors [12]

Group 1 - The international gold price is reported at $4214.2 per ounce, while palladium is at $1497.4 per ounce, and silver is at $60.42 per ounce. The domestic gold price is at ¥950.0 per gram [1] - Major domestic gold retailers have varying prices, with Chow Tai Fook at ¥1328 per gram, and China Gold at the lowest price of ¥1232 per gram. Other notable prices include Chow Sang Sang at ¥1324, and multiple brands including Liufu Jewelry, Xie Rui Lin, and Jin Zun at ¥1328 per gram [1] - The price range among different brands indicates competitive pricing in the domestic market, with the lowest price from Cai Bai Jewelry at ¥1292 per gram and the highest from several brands at ¥1328 per gram [1]

Core Viewpoint - Haitong International has given a "Buy" rating to Luk Fook Holdings (00590), predicting a net profit of HKD 15.78 billion, HKD 18.00 billion, and HKD 19.77 billion for the fiscal years 2026-2028, with a target price of HKD 40.35 based on a 15x PE for FY26 [1] Group 1: Financial Performance - For FY26H1, the company reported revenue of HKD 68.43 billion, a year-on-year increase of 25.6%, with a gross profit of HKD 23.73 billion, up 33.2% year-on-year, resulting in a gross margin of 34.7%, an increase of 2.0 percentage points [1] - Operating profit reached HKD 7.80 billion, reflecting a year-on-year growth of 45.4%, with an operating margin of 11.4%, up 1.6 percentage points [1] - The net profit attributable to shareholders was HKD 6.19 billion, a 42.5% increase year-on-year, with a net margin of 8.8%, up 1.1 percentage points [1] - The interim dividend was set at HKD 0.55 per share, with a payout ratio of 52% [1] Group 2: Sales and Store Expansion - Same-store sales improved, with overall same-store sales for FY26H1 increasing by 7.7%. By category, same-store sales for gold and platinum increased by 2.7%, while same-store sales for priced jewelry surged by 22.2% [2] - By region, same-store sales in Hong Kong, Macau, and overseas rose by 7.2%, while same-store sales in mainland China increased by 10.9%. From October 1 to November 21, same-store sales in both markets showed double-digit growth, with mainland sales significantly improving compared to FY26Q2 [2] - As of FY26H1, the total number of stores globally was 3,113, with a net decrease of 174 stores. The company plans to open 20 new stores overseas in FY26 and aims to enter at least three new countries and add 50 overseas stores over the next three years [2] Group 3: Margin and Cost Management - The gross margin for FY26H1 was 34.7%, an increase of 2.0 percentage points, driven by rising gold prices and an increase in the proportion of priced jewelry sales. Sales of gold and platinum amounted to HKD 40.96 billion, up 11.0% year-on-year, with a gross margin of 30.3%, an increase of 2.8 percentage points [3] - Sales of priced jewelry reached HKD 22.76 billion, a significant increase of 67.9%, with a gross margin of 36.8%, down 0.5 percentage points. The introduction of new products like ice diamonds significantly boosted wholesale revenue [3] - The sales expense ratio decreased to 16.3%, down 1.5 percentage points year-on-year, and the administrative expense ratio was 2.7%, down 0.8 percentage points, benefiting from operational leverage [3]

Core Viewpoint - Haitong International has given a "Buy" rating to Luk Fook Holdings (00590), predicting a net profit of HKD 15.78 billion, 18.00 billion, and 19.77 billion for the fiscal years 2026-2028, with a target price of HKD 40.35 based on a 15x PE for FY26 [1] Group 1: Financial Performance - For FY26H1, the company reported revenue of HKD 68.43 billion, a year-on-year increase of 25.6%, with a gross profit of HKD 23.73 billion, up 33.2%, resulting in a gross margin of 34.7%, an increase of 2.0 percentage points [1] - Operating profit reached HKD 7.80 billion, reflecting a 45.4% year-on-year growth, with an operating margin of 11.4%, up 1.6 percentage points [1] - The net profit attributable to shareholders was HKD 6.19 billion, a 42.5% increase year-on-year, with a net margin of 8.8%, up 1.1 percentage points [1] - The interim dividend per share was HKD 0.55, with a payout ratio of 52% [1] Group 2: Sales and Market Expansion - Same-store sales improved, with overall same-store sales for FY26H1 increasing by 7.7%. By category, same-store sales for gold and platinum increased by 2.7%, while same-store sales for priced jewelry surged by 22.2% [2] - By region, same-store sales in Hong Kong, Macau, and overseas rose by 7.2%, while same-store sales in mainland China increased by 10.9%. From October 1 to November 21, same-store sales in all markets showed double-digit growth, with mainland China showing significant improvement compared to FY26Q2 [2] - As of FY26H1, the total number of stores globally was 3,113, with a net decrease of 174 stores. The company plans to open 20 new stores overseas in FY26 and enter at least three new countries while adding 50 overseas stores over the next three years [2] Group 3: Margin and Cost Management - The gross margin improved to 34.7%, up 2.0 percentage points, driven by rising gold prices and an increased proportion of priced jewelry sales. Sales of gold and platinum amounted to HKD 40.96 billion, up 11.0%, with a gross margin of 30.3%, an increase of 2.8 percentage points [3] - Sales of priced jewelry reached HKD 22.76 billion, a 67.9% increase, with a gross margin of 36.8%, down 0.5 percentage points. The introduction of new products like ice diamonds significantly boosted wholesale revenue [3] - The sales expense ratio decreased to 16.3%, down 1.5 percentage points, and the administrative expense ratio fell to 2.7%, down 0.8 percentage points, benefiting from operational leverage [3]

Core Viewpoint - Luk Fook Holdings is a leading jewelry retailer in Hong Kong and mainland China, with a multi-brand matrix and a significant retail presence globally, despite facing revenue declines in FY2025 [1][4]. Financial Performance - For FY2025, the company reported a revenue of HKD 13.34 billion, a year-on-year decrease of 13.0%, and a net profit attributable to shareholders of HKD 1.1 billion, down 37.8% year-on-year [1]. - The company’s inventory of gold and platinum/jewelry was valued at HKD 5.46 billion and HKD 5.28 billion, respectively, reflecting increases of 22.9% and 3.0% year-on-year due to rising gold prices [1]. Business Segmentation - In FY2025, the company’s revenue from retail, wholesale, and brand businesses was HKD 11.03 billion, HKD 1.41 billion, and HKD 0.90 billion, with year-on-year changes of -13.5%, -8.8%, and -12.6%, respectively [2]. - The revenue distribution was 82.7% from retail, 10.5% from wholesale, and 6.8% from brand business, with profit margins of 9.3%, 1.0%, and 69.2% respectively [2]. Geographic Performance - Revenue from mainland China and Hong Kong/Macau was HKD 5.27 billion and HKD 8.07 billion, with year-on-year changes of -0.2% and -19.6%, respectively [2]. - The average revenue per store was HKD 1.66 million in mainland China and HKD 7.47 million in Hong Kong [2]. Brand Strategy - The company has developed a multi-brand matrix including Luk Fook Jewelry, King Fook, and others, catering to various consumer segments [3]. - As of FY2025, the core brand Luk Fook Jewelry had 2,805 stores globally, and the company plans to launch new product lines and enhance brand promotion through celebrity endorsements [3]. Expansion Plans - As of March 2025, the company operated 3,287 stores across 11 countries and regions, with plans to open 50 new overseas stores over the next three years [4]. - The company aims to increase its presence in the mainland market through diverse store styles and e-commerce channels, leveraging collaborations with celebrities and IP partnerships [4]. Profit Forecast - The company is expected to see a steady recovery in performance from FY2026 onwards, with projected net profits of HKD 1.52 billion, HKD 1.73 billion, and HKD 1.93 billion for FY2026 to FY2028, representing year-on-year growth of 39%, 13%, and 12% respectively [4].

Investment Rating - The report assigns a "Buy" rating for Lukfook Holdings (00590.HK) for the first time [1]. Core Insights - Lukfook Holdings is a leading jewelry retailer in Hong Kong and mainland China, with a significant recovery in same-store sales and expansion into overseas markets [8]. - The company has established a comprehensive multi-brand matrix, including Lukfook Jewellery, King Fook, Heirloom Fortune, Goldstyle, Lukfook Joaillerie, and Love LUKFOOK JEWELLERY, catering to various consumer segments [8]. - The report forecasts a steady recovery in performance from FY2026 onwards, with projected net profits of HKD 1.52 billion, HKD 1.73 billion, and HKD 1.93 billion for FY2026, FY2027, and FY2028, respectively, reflecting year-on-year growth rates of +39%, +13%, and +12% [8]. Summary by Sections Company Overview - Lukfook Holdings is a prominent jewelry retailer in Hong Kong and mainland China, listed on the Hong Kong Stock Exchange since 1997. The company has expanded its brand matrix and currently operates over 3,100 retail points globally [13][8]. - For FY2025, the company reported total revenue of HKD 13.34 billion, a year-on-year decline of 13.0%, and a net profit of HKD 1.1 billion, down 37.8% year-on-year [13][8]. Multi-Brand Matrix - The company has developed a multi-brand strategy that covers various segments of the jewelry market, enhancing its market share and competitiveness [44]. - The core brand, Lukfook Jewellery, focuses on the mass market, while King Fook targets the high-end segment. Other brands cater to niche markets, ensuring a broad consumer appeal [44]. Financial Performance - The report highlights a recovery trend in financial performance, with FY2026H1 revenue reaching HKD 6.843 billion, a year-on-year increase of 25.6%, and a net profit of HKD 619 million, up 42.52% [24][23]. - The company’s gross margin improved significantly, reaching 33.1% in FY2025, an increase of 5.9 percentage points year-on-year, primarily due to rising gold prices [25][30]. Market Expansion - As of March 2025, Lukfook Holdings operates in 11 countries and regions, with a total of 3,287 stores, including 3,179 in mainland China [63][64]. - The company plans to enter three new countries and add 50 overseas stores over the next three years, with 20 new stores planned for FY2026 [63][64].

Group 1 - The international gold price is reported at $4208.2 per ounce, while international palladium is at $1434.4 per ounce, and international silver is at $57.11 per ounce. The domestic gold price is at ¥950.7 per gram [1] - Major domestic gold retailers have varying prices, with Chow Tai Fook at ¥1328 per gram, and China Gold at the lowest price of ¥1232 per gram. Other notable prices include Chow Sang Sang at ¥1327, and multiple brands including Liufu Jewelry, Xie Rui Lin, and Jin Zhi Zun all at ¥1328 per gram [1]

Summary of LUK FOOK Holdings Conference Call Company Overview - **Company**: LUK FOOK Holdings - **Industry**: Jewelry Retail Key Points and Arguments Impact of VAT Reform - The VAT reform in mainland China has benefited LUK FOOK, as small gold shops faced significant challenges, leading consumers to shift towards branded gold shops for weight-based gold purchases, thus boosting sales for LUK FOOK [2][4] - Despite the challenges, the fixed-price gold segment remains the primary growth driver, with expectations of continued popularity [4] Sales Performance - In October and November 2025, LUK FOOK experienced strong performance in the mainland market, with fixed-price gold sales more than doubling in October due to a price increase announcement [3] - November data showed that weight-based gold sales outperformed fixed-price gold, indicating that the price adjustments did not negatively impact sales significantly [10] Pricing Strategy - The company has raised prices by 7%-8% due to the VAT reform, which is expected to reflect positively in gross margins in the second half of the fiscal year [7][15] Market Expansion Plans - LUK FOOK aims to expand its overseas presence, targeting the opening of 50 new stores in three years, with eight new stores already added by mid-2025, including a new store in Vietnam [8] - The overseas market is performing well and is a key focus for future growth [8] Local Market Strategies - To counteract the decline in tourist spending in Hong Kong, LUK FOOK plans to enhance local consumer marketing strategies [6] - The company is focusing on promoting local consumption to mitigate the impact of reduced mainland tourist spending [6] Performance in Duty-Free Shops - The Hainan duty-free shops have shown exceptional performance, with sales in October and November increasing by approximately 70% year-on-year, particularly in weight-based gold products [12] Challenges and Adjustments - The mainland market saw a net reduction of 179 stores in the first half of 2025, with an expected total of over 200 closures for the year, but a return to net growth is anticipated in fiscal year 2026 [4][18] - The company is also addressing the increased costs from the VAT reform by adjusting pricing strategies to maintain competitiveness [9] Product Performance - The ice diamond series currently accounts for about 4% of total revenue, with growth seen in gold-inlaid diamond products, while 18K gold-inlaid diamond products are experiencing a decline [13] Profitability Outlook - Despite a rise in gold prices in 2025, the increase in gross margin is not expected to match that of 2024. However, the company anticipates that gross margins in the second half of the fiscal year may exceed those in the first half [15][23] Consumer Behavior Insights - The company has noted that consumer sensitivity to price increases is manageable, as evidenced by the performance of weight-based gold sales post-price adjustment [10] Regional Market Differences - The Macau market benefits from a price advantage of over 20% compared to mainland China, attracting more tourists, while Hong Kong's performance is more subdued due to a lower proportion of mainland tourist spending [11] Future Expectations - The company expects strong sales performance during the upcoming Chinese New Year, particularly if Valentine's Day coincides with the holiday, which could further boost sales [24]

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年11月30日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 六福集團(國際)有限公司 呈交日期: 2025年12月3日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00590 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 800,000,000 | HKD | | | 0.1 HKD | | 80,000,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 800,000,000 | HKD | | | 0.1 HKD | | 80,000,000 | 本月底法定/註冊股本總額 ...