UBS: Raises target price of YUE YUEN IND (00551) to HK$20.3, narrowing decline in retail sales in the second half of last year.

UBS released a research report stating that YUE YUEN IND (00551) is expected to see a narrower decline in retail sales in the second half of last year compared to the first half. Online sales outperformed offline sales, inventory levels remained healthy, and discounts in the fourth quarter improved compared to the first three quarters. The target price for the company has been raised from 18.4 Hong Kong dollars to 20.3 Hong Kong dollars, with a rating of "buy." The Yu Yuan management team revealed that in a fluctuating demand environment, OEM customers have maintained a cautious attitude towards placing orders. They continue to push first quarter 2026 demand to the fourth quarter of 2025. However, it is expected that with the upgrade of product portfolio, the average selling price of products in the fourth quarter of 2025 could achieve a year-on-year increase. Last year's full-year unit volume is expected to see a low single-digit year-on-year increase, but some of the increase may be offset by sharing tariff costs with customers.