HK Stock Market Move | YUE YUEN IND (00551) continues to fall by more than 4%, with persistently weak visibility of first-quarter orders. Brand customers are sharing the impact of tariffs with an average selling price.

YUE YUEN IND (00551) fell by over 4%, dropping 2.78% to HK$16.06 as of the time of writing, with a trading volume of HK$1.06 billion. On the news front, on March 12, YUE YUEN IND announced its performance for 2025, with a net profit attributable to owners of approximately US$381 million, a decrease of 2.9% year-on-year; basic earnings per share of 23.76 US cents and a proposed final dividend of HK$0.9 per share. Daiwa pointed out that YUE YUEN IND management emphasized that the visibility of orders in the first quarter of this year continued to be weak, and sales volume and gross profit margin may be under pressure year-on-year due to various long holidays in China, Vietnam, and Indonesia, continuous tariff sharing arrangements, and cautious customer ordering pace. Four brand customers, accounting for about 70% of Yue Yuen's OEM revenue, still need to share tariffs, causing a low single-digit impact on Yue Yuen's average selling price. Daiwa further stated that the management holds a cautious outlook on the OEM business, with guidance indicating that average selling price and sales volume for 2026 will remain flat to slightly soft, and order visibility weakening to around 2 to 3 months. Given that YUE YUEN IND's stock price has been relatively strong compared to its OEM industry peers since April last year, the bank currently considers the company's valuation relative to its industry peers to be reasonable.