Core Viewpoint - CICC maintains a "outperform" rating for Luk Fook Holdings (00590) with a target price of HKD 30.55, driven by a 26% year-on-year revenue growth and a 43% increase in net profit attributable to shareholders, primarily due to strong growth in wholesale business in mainland China and an increase in the proportion of high-margin priced jewelry, pushing the gross margin to a historical high of 35% [1][2] Financial Performance - For the first half of FY26, the company's revenue increased by 26% to HKD 6.8 billion, and net profit attributable to shareholders rose by 43% to HKD 620 million, aligning with market expectations. The company declared an interim dividend of HKD 0.55 per share, corresponding to a payout ratio of 52% [2] Growth Drivers - The revenue growth in mainland China was particularly strong, with a 54% increase to HKD 3 billion, driven by a 203% increase in wholesale business revenue due to a rich product category and popular new products. Retail/brand business revenue grew by 24% and 18% respectively. During the period, the number of self-operated/brand stores in mainland China increased by 23 and decreased by 202 respectively. 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 [3] Margin Improvement - The gross margin increased by 2.0 percentage points to 35%, mainly due to rising gold prices and an increase in the proportion of high-margin priced jewelry. Operating leverage improved, with sales and management expense ratios decreasing by 1.5 percentage points and 0.8 percentage points respectively. Other income was HKD 90 million, while gold hedging losses amounted to HKD 410 million compared to HKD 230 million in 1HFY25 [4] Market Expansion and Channel Optimization - The company is actively expanding into overseas markets, with management confident in achieving a net increase of 50 stores overseas ahead of schedule by FY27 as part of a three-year plan from FY26 to FY28. Despite rapid growth in domestic business, the company continues to optimize its domestic channels, expecting to close 200 stores in mainland China in FY26. From October to November 21, same-store sales in mainland China, Hong Kong, Macau, and overseas markets all saw double-digit growth, with significant improvement in mainland same-store sales compared to Q2 FY26 [5]
中金：维持六福集团“跑赢行业”评级和目标价30.55港元 内地批发表现亮眼