Citi: Cuts YUE YUEN IND (00551) target price to HK$17.5, maintains "Buy" rating

Citi issued a research report stating that YUE YUEN IND (00551) announced a profit warning for the first nine months of this year, with performance slightly below expectations. Citi cut YUE YUEN IND's 2026 earnings forecast by 13% and made minor adjustments of 0% to 2% to its 2027-2028 forecasts; the target price was lowered from HK$18 to HK$17.5, with the "Buy" rating maintained. The bank expects the company's 2027 dividend yield to be approximately 7%. YUE YUEN IND's net profit for the first half was US$72 million. Based on this, third-quarter net profit is estimated at approximately US$53 million to US$67 million, down 37% to 50% year-on-year, but up 45% to 83% from US$36.8 million in the second quarter. The company guided for net profit attributable to owners for the first nine months to decline 50% to 55% year-on-year; compared with US$278.7 million in the same period last year, this implies net profit of approximately US$125 million to US$139 million. The bank believes the company's profitability improved quarter-on-quarter, but the pace of recovery was slightly below expectations.