HK Stock Market Move | ZHOU HEI YA (01458) rose by more than 4% again, with a year-on-year profit growth of over 55% in the first half of the year. China Gold expects its scale to further increase in the second half of the year.

ZHOU HEI YA (01458) rose by over 4%, as of the time of writing, it was up by 4.02% to 2.59 Hong Kong dollars, with a turnover of 38.0363 million Hong Kong dollars. On the news front, on July 18, ZHOU HEI YA released a profit forecast for the first half of 2025, estimating a profit of approximately 90 million to 113 million yuan in the first half of 2025 (excluding the profit and loss and related income tax impacts of the equity method investees), representing an increase of 55.2% to 94.8% compared to the same period last year. This is mainly due to the optimization of store structure, focusing on improving store operation quality, and effective sales growth on a per store basis during the reporting period. Additionally, the decrease in raw material costs has driven an increase in gross profit margin, combined with lean management to optimize sales expense ratio, which has enhanced the overall profitability of the group. CICC research report pointed out that it will maintain its profit expectations for ZHOU HEI YA in 2025 and 2026. The bank maintains its target price of 3.0 Hong Kong dollars, with the current stock price corresponding to a P/E ratio of 26.8/24.1 times for 25/26 years. The target price corresponds to a P/E ratio of approximately 32/29 times for 25/26 years, with a potential upside of approximately 20.5% from the current price, maintaining an outperform industry rating. In the second half of 2025, the company will optimize its promotion strategy for emerging channels to continue to grow in scale, summarizing the sales and product data of the first half of 2025 in emerging channels, optimizing and iteratively matching products and channels. The bank expects further growth in scale in the second half of the year.