Jefferies: Lowers YUE YUEN IND (00551) target price to HK$5.6, maintains "Underperform" rating.

Jefferies released a research report stating that it has lowered the target price of YUE YUEN IND (00551) from HK$5.7 to HK$5.6, maintaining an "Underperform" rating. The market expects that YUE YUEN IND's stronger fourth-quarter performance will offset the weak third-quarter performance, but the bank disagrees with this view. The bank stated that its earlier judgment on Adidas rush orders appears to be gradually confirmed, as third-quarter orders, average selling prices, and profitability were all better than previously feared, but some of the strong performance may stem from demand being pulled forward from the fourth quarter. The bank lowered YUE YUEN IND's 2026 and 2027 net profit forecasts by 2% and 5%, respectively, to US$196 million and US$224 million. The bank believes that investors remain focused on Adidas-related upside potential while underestimating Nike-related downside risks.