[ET Net News Agency, 5 December 2019] Goldman Sachs lowered its target price for Luk
Fook Holdings (00590) to HK$25 from HK$26.6 and maintained its "buy" rating.
The research house said Luk Fook's 1H FY2020 net income missed Goldman's estimate due to
lower sales/other revenues and less-than-expected OPEX savings. The company reiterated its
strategy to penetrate into lower-tier cities through licensing, and revised up its
expansion plan to 200 stores from 150 in FY2020.
Goldman revised down its PRC retail sales estimates by 11-13% for FY2020-22 on weaker
SSSG forecasts, and expects a higher contribution from wholesale and license segments at
29% in FY2020 (versus previous 27%). Net-net, it cut its FY2020-22 net income estimates by
14-18%. (KL)