Goldman Sachs: Lower Yue Yuen Industrial (00551) target price to HK$18, maintaining "buy" rating.

Goldman Sachs released a research report stating that it maintains a "buy" rating on YUE YUEN IND (00551), with the target price lowered from 18.2 Hong Kong dollars to 18 Hong Kong dollars. They believe that Yue Yuen's valuation is not expensive and forecast a dividend yield of around 8% this year, which is attractive. YUE YUEN IND expects the first quarter sales volume to be the lowest quarter of the year, as major holidays in China, Vietnam, and Indonesia are concentrated in the first quarter of this year. Due to uncertainties related to tariffs, weak macroeconomic conditions, and geopolitical events, visibility of orders remains low, estimated at about 2 to 3 months. The report mentioned that Yue Yuen's management stated that the trend of orders for the whole year is still unclear, but the company will strive to maintain overall sales volume roughly stable compared to the previous year. Management indicated that the incremental support from the World Cup is limited, as its main positive impact is on the soccer shoe business. In terms of average selling price, management expects the average selling price to remain flat or slightly soft compared to last year, mainly due to the higher base of comparison from last year and the production of simpler products at the newly invested Central Java factory currently. Management also pointed out that, given the higher base in the second half of last year, the downward pressure on average selling prices in the second half of this year will be higher than in the first half.