[ET Net News Agency, 10 July 2020] Jefferies Research lowered its target price for Yue
Yuen Industrial (Holdings)(00551) to HK$13 from HK$21 and maintained its "hold" rating.
The research house expects Yue Yuen's manufacturing business to face a similar amount of
pressure in 2Q (versus that in 1Q) due to (1) shipment delays as requested by clients and
(2) capacity adjustment in China (including the closure of a plant in Hubei). Although the
retail operation (Pou Sheng) may deliver recovery in 2Q, Jefferies believes Yue Yuen's
consolidated financial performance may remain under pressure.
Jefferies cut its 2020/2021 earnings forecasts by 76%/27%, respectively mainly to
reflect a weaker-than-expected manufacturing business. Having said that, Jefferies
continues to expect Yue Yuen's adjustments to bear fruit in 2022. (KL)