BOCI International: Raised LUK FOOK HOLD (00590) target price to HK$29.2, first-half net profit exceeds expectations.

Bank of China International released a research report stating that LUK FOOK HOLD (00590) saw a 43% year-on-year increase in net profit to 619 million yuan in the first half of the 2026 fiscal year, exceeding the bank's expectations, reflecting the company's strong performance in the background of expanding product supply and the industry's sales recovery. The bank maintains a "buy" rating and raises the target price to 29.2 Hong Kong dollars. The bank believes that LUK FOOK HOLD will continue to perform strongly in the industry in the next few quarters. Especially, its self-operated retail business outside the mainland (accounting for more than 50% of revenue in the first half of the 2026 fiscal year) makes it a major beneficiary of the gold product value-added tax policy. Looking ahead to the full year of the 2026 fiscal year, the bank expects LUK FOOK HOLD's performance to benefit from multiple positive factors, including lower inventory costs, controllable hedge losses, and more importantly, improvement in sales performance in the Hong Kong and Macau markets. These factors will help support the continuous upward adjustment of the company's valuation.