UBS cut its target price for Luk Fook (00590) to HK$26.5 from HK$27, and maintained its "buy" rating.
It cited Luk Fook indicating that the double digit revenue growth was mainly driven by the gold rush in April and May, and the pent-up gold demand has diminished in June.
UBS expects the improving sales trend would also lead to operating leverages, and forecast opex to sales ratio of 10% for FY2014, down from 10.6% in FY2013.
But it cuts FY2014 EPS by 4% to reflect its new self-operated store assumption of 15
(from 20) and a GPM of 20.1% (from 20.4%). The revision was largely due to company's new store guidance; and the 8% decline of gold price since mid-June (yielding 0.3ppt GPM variation).
【6月限時優惠】 送價值$175維柏健明目藍莓精華36:1► 火速行動
