[ET Net News Agency, 19 March 2020] Goldman Sachs lowered its target price for Yue Yuen
Industrial (Holdings)(00551) to HK$15.5 from HK$24.5 and maintained its "neutral" rating.
The research house revised down its revenue forecast by 8% in 2020 to factor in its
latest forecast for Pou Sheng International (03813) and weaker OEM business.
Goldman estimated a 3% revenue decline for the OEM business in 2020, in line with
previous challenging cycles in 2012 and 2016 when OEM revenue declined 3% and 2%
respectively.
It revised down its net income forecast by 43% due to lower profits from Pou Sheng and
the deleveraging impact and the efficiency loss as production is disrupted. Goldman said
Yue Yuen used to commit a flattish dividend per share even when earnings declined in 2019.
But with bigger uncertainties on global demand and profitability, together with its weaker
balance sheet, Goldman thinks there might be uncertainties in dividend payout. (KL)
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00551 YUE YUEN IND
Nominal 
12.000 +0.200 (+1.695%) Others
19/03/2020 10:28
{I-bank focus}Goldman cuts Yue Yuen Ind (00551) to HK$15.5
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