Core Viewpoint - CICC maintains a "outperform industry" rating for Luk Fook Holdings (00590) with a target price of HKD 30.55, driven by strong growth in wholesale business in mainland China and an increase in the proportion of high-margin priced jewelry, leading to a historical high gross margin of 35% [1] Group 1: Performance Summary - For 1HFY26, the company's revenue increased by 26% year-on-year to HKD 6.8 billion, and net profit attributable to shareholders rose by 43% to HKD 620 million, aligning with market expectations [1] - The company declared an interim dividend of HKD 0.55 per share, corresponding to a payout ratio of 52% [1] Group 2: Growth in Wholesale Business - In 1HFY26, revenue from mainland China grew by 54% to HKD 3 billion, with wholesale business benefiting from a diverse product range and popular new products, resulting in a 203% increase [2] - Retail/brand business revenue in mainland China increased by 24% and 18% respectively, while the number of self-operated/brand stores in mainland China changed by +23/-202 [2] - Revenue from Hong Kong, Macau, and overseas markets grew by 10% to HKD 3.9 billion, with retail/wholesale/brand business revenues increasing by 9%/89%/4% respectively [2] Group 3: Gross Margin and Operating Leverage - The gross margin for 1HFY26 increased by 2.0 percentage points to 35%, primarily due to rising gold prices and a higher proportion of high-margin priced jewelry [3] - Operating leverage improved, with sales and management expense ratios decreasing by 1.5 percentage points and 0.8 percentage points respectively [3] - Other income was HKD 90 million, while gold hedging losses amounted to HKD 410 million, compared to HKD 230 million in 1HFY25 [3] Group 4: Expansion and Channel Optimization - The company is focused on expanding its overseas market, with management confident in achieving a net increase of 50 stores overseas ahead of schedule by FY27 [4] - In the context of rapid domestic business growth, the company continues to optimize its domestic channels, expecting to close 200 stores in mainland China by FY26 [4] - From October to November 21, same-store sales in mainland China, Hong Kong, Macau, and overseas markets all showed double-digit growth, with significant improvement in mainland China compared to 2QFY26 [4]
中金：维持六福集团(00590)“跑赢行业”评级和目标价30.55港元 内地批发表现亮眼