Guosen: Maintains LUK FOOK HOLD (00590) "outperform" rating, pricing gold continues to outperform the market.

Guosen released a research report stating that LUK FOOK HOLD (00590) released its operating data for October-December 2025, with overall retail value increasing by 26% year-on-year, and same store sales growing by 15%. Both showed acceleration compared to the previous quarter. The bank maintains the company's forecasted net profit for the fiscal years 2026-2028 at 15.01/17.87/20.28 billion Hong Kong dollars respectively, with corresponding PE ratios of 10.7/9/7.9 times, and maintains an "outperform the market" rating. Guosen's main points are as follows: By region, global markets are all performing well Same store sales in Hong Kong increased by 15%, Macau by 22%, and overseas by 11%; same store sales for self-operated stores in Mainland China grew by 7%, while franchise store same store sales increased by 31%. In terms of product structure, priced gold remains the leader The group's overall same store sales for priced gold increased by 32% in a high base situation. Priced gold accounted for 17% of the company's total retail value. In addition, same store sales for 18K gold diamonds remained stable, showing a significant improvement from a 10% decline in the previous quarter. The recovery of this category will help improve the company's gross profit margin. In terms of store expansion, a net closure of 40 stores was seen during the quarter This was a slowdown from the net closure of 49 stores in the previous quarter, with a total of 3073 stores at the end of the period. The pace of opening stores overseas continued, with 9 new stores opened during the quarter and a total of 48 overseas stores at the end of the period. Overall, the company continued its strong growth performance in October-December 2025 The overall same store sales for the first seven days of January 2026 were even more promising. This was attributed to the company's product innovation and upgrades, store channel optimization, and accelerated overseas development. In the future, the company will continue to seize the trend of jewelry consumption with dual attributes of "fashion + value preservation" by offering high-quality products and store services to win market share. Risks include: product innovation falling short of expectations, significant fluctuations in gold prices, overseas business expansion falling short of expectations, and poor management by franchisees.