＜Research＞G Sachs Trims TPs of YUE YUEN IND & POU SHENG INT'L, Keeps Buy Ratings for Both

　　Goldman Sachs updated its profit forecasts on YUE YUEN IND (00551.HK) -0.520 (-4.134%) Short selling $1.58M; Ratio 20.065% and POU SHENG INT'L (03813.HK) 0.000 (0.000%) .

　　The broker lowered its 2Q24 revenue forecast for POU SHENG to a 10.5% YoY drop, reflecting weaker overall consumption and unfavourable weather conditions. Gross margin expansion continued to benefit from disciplined discounting, partly offset by operational deleveraging and a less favourable channel sales mix. The broker meanwhile projected YUE YUEN to be on track for a full year mid- to high-single-digit volume growth, as equipment utilisation and efficiency gains should support margin expansion.

　　Goldman lowered its net profit forecast for POU SHENG by an average of 9% from 2024 to 2026, and lowered its profit forecast for YUE YUEN by 1% for the same period, citing weaker-than-expected retail performance offset by growth in the OEM business. The broker highlighted that YUE YUEN's shares have retreated a cumulative 18% this month, reflecting negative sentiment over potential US tariffs, but improved equipment utilisation and efficiencies support relatively higher earnings visibility.

　　Goldman forecasted YUE YUEN to report a 2Q net profit of US$82 million, rocketing 151% YoY. The broker considered YUE YUEN's risk-return profile attractive, as the stock now trades at 7x projected P/E and carries a 10% dividend yield.

　　The broker trimmed its target price on YUE YUEN to HK$18.8 from HK$19 and cut its target price on POU SHENG to HK$1.04 from HK$1.15. Both stocks are rated Buy.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-19 12:25.)

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