[ET Net News Agency, 15 May 2020] Goldman Sachs lowered its target price for Yue Yuen
Industrial (Holdings)(00551) to HK$13.5 from HK$14 and maintained its "neutral" rating.
The research house said Yuen Yuen's 1Q net income came at US$56mn loss (better than the
earlier profit warning of US$60-70mn loss), weaker than Goldman's estimate of US$5mn loss
due to weaker OEM OPM (gross profit margin) due to factory closure costs, higher non-op
and tax expenses, partially offset by better-than-expected retail business.
Management plan to cut capacity by 10-15% in 2020 by closing some factories, leveraging
unpaid leaves and headcount adjustment to save costs and improve utilization rate. Goldman
believes uncertainty on order demand due to weaker global demand could continue to impact
the efficiency and margins.
Goldman revised down its 2020 net income to loss-making and 2021-22 net income by 10-12%
to factor in more pressure on OEM business. (KL)
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00551 YUE YUEN IND
Nominal 
14.100 +0.300 (+2.174%) Research Report
15/05/2020 17:29
{I-bank focus}Goldman cuts Yue Yuen Industrial to HK$13.5
| Remark: | Real time quote last updated: 20/09/2024 18:00 |
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