卢福控股（国际）（0590.HK）2027财年增长目标超出预期

Luk Fook Holdings (International)(0590.HK) FY27E Growth Target Stronger Than Expected CITI'S TAKE Luk Fook’s FY26 net profit (+86% yoy) was in line with its positive profit alertwith 114% yoy in 2H vs. 43% yoy in 1H. Mgmt expect double digit growth forbothsales and NP in FY27E,significantly above our and marketexpectations. Given GPM & NPM contraction in FY27E on weaker gold price,the NP growth target shows mgmt’s ambition to sustain QTD’s strong SSSGand to speed up store expansion in HK/Macau and overseas. We raiseFY27E/28E NP 8%/10% on higher revenues but our flattish FY27E NPforecast is still below mgmt target. Valuation is compelling at 6x fwd P/Eand7.4%yield.Buy with new TP of HK$31.8 on higher estimates,corresponding to 9x P/E. 2HFY26 results highlight —Revenue grew 31% in 2H vs. 26% in 1H, of which HK,Macau & overseas growth accelerated to 30% vs. 10%, while Mainland China growthslowed down to 33% vs. 54% on higher comp base. GPM expanded 4.6ppts yoy to38.0% (vs. 34.7% in 1H) under gold price hike and higher sales mix of fixed price goldproducts. Core OPM of 22.5% in 2H (vs. 17.0% in 1H) improved along with GPMexpansion and operating leverage. Adjusted net profit excluding gold hedging lossand FX swing increased 80% yoy in 2H vs. 75% in 1H. 1QFY27 performance —For 1QFY27-to-date (Apr 1 to Jun 21), Mainland China SSSGaccelerated to >20% (vs. ~10% in 4QFY26) due to demand recovery after gold pricepullback. Licensed stores outperformed self-operated stores for better storelocation, but both recorded double-digit growth. HK/Macau SSSG was >40% (vs.39% in 4QFY26) on more attractive pricing under RMB appreciation. GPM declinedby MSD-HSD on gold price decline and mix shift to weight-based gold per mgmt. FY27E outlook —Mgmt expect double digit growth in both revenue and NP. Weight-based gold product retail sales mix to increase on market demand. Wholesalerevenue growth to normalize at double digit. HK/Macau should outpace MainlandChina. Group GPM might be below FY24’s (27.2%), with gold GPM dropping on goldprice decline and fixed price jewelry GPM remaining flattish or slightly declining.NPM to decline at milder magnitude than GPM decline given operating leverage andpotential gold hedging gain. It expects net store closures in Mainland China in 1H andflattish in full year if gross opening to accelerate in 2H on better market demand. It Tiffany FengAC+852-2501-2759tiffany.feng@citi.com Xiaopo Wei, CFA+852-2501-2472xiaopo.wei@citi.com Brian Cho+852-2501-2712brian.cho@citi.com See Appendix A-1 for Analyst Certification, Important Disclosures and Research Analyst Affiliations. © 2026 Citigroup Inc. No redistribution without Citigroup’s written permission.Source: Citi Research Estimates, Company data, dataCentral, Citi Research Adding Upside 30-Day Short-Term View on Luk Fook Holdings(International) (0590.HK) Mgmt expect double digit growth for both sales and NP in FY27E, significantly above our and market expectations. GivenGPM & NPM contraction in FY27E on weaker gold price, the NP growth target shows mgmt’s ambition to sustain QTD’sstrong SSSG and to speed up store expansion in HK/Macau and overseas. Our raised forecasts are still below mgmt target,showing potential more upward revision room ahead. Valuation is compelling at 6x fwd P/E and 7.4% yield. Luk Fook Holdings (International) Company description Luk Fook is one of the leading jewelry retailers in Hong Kong and MainlandChina. The company was listed on HKEx in May 1997. The company principallyengages in sourcing, designing, wholesaling, trademark licensing andretailing of gold and platinum jewelry and gem-set jewelry products, with atotal of 1,455 stores in Mainland China, Hong Kong, Macau and other Investment strategy We have a Buy rating on LF shares. The company’s sequentially improvinggem-set SSSG, together with a recovery in sentiment in HK retail, results in abetter sales and earnings outlooks. The recovery pace of tourist consumption Valuation Our target price for LF of HK$31.8 is based on a discounted cash flow (DCF)model with a 14.1% WACC and a 2.0% long-term growth rate. Our WACC isderived from a capital structure of 100% equity and 0% net debt, cost ofequity of 14.1%, and an after-tax cost of debt of 1.0%. Risks Downside risks that could prevent the shares from reaching our target priceinclude: (1) worse-than-expected gold jewelry demand volume curbed by anysharply higher gold prices; (2) worse-than-expected sales on an accelerateddecline of mainland China tourist traffic in Hong Kong; (3) weaker-than-expected gold gross margin due to a sharper gold price decline; and (4) If you are visually impaired and would like to speak to a Citi representative regarding the detailsof the graphics in this document, please call USA 1-888-500-5008 (TTY: 711), from outside the Appendix A-1 ANALYST CERTIFICATIONThe research analysts primarily responsible for the preparation and content of this research report are either (i) designated