[ET Net News Agency, 17 July 2013] BofA Merrill Lynch raised its price target for Luk
Fook Holdings (00590) to HK$21.5 from HK$18.5, and maintained its "underperform" rating in
light of the lackluster gold price, margin uncertainties and low visibility for both sales
and product mix in FY2014/15.
It lifted Luk Fook's FY2014-16 EPS by 8-17% to factor in better sales and operating
leverage.
BofAML noted that volume again is the main driver. The gold sales momentum YTD indicates
that the mix could improve slightly, but likely to remain at an elevated level for FY2014.
(KL)