HK Stock Market Move | YUE YUEN IND (00551) rises over 3%; Morgan Stanley expects the company's profit warning for the first three quarters to have limited short-term pressure on the stock price.

YUE YUEN IND (00551) rose over 3%, up 1.99% as of press time to HK$13.33, with turnover of HK$12.3041 million. On the news front, YUE YUEN IND recently issued a profit warning for its third-quarter results. Morgan Stanley noted that the company expects net profit for the first three quarters of this year to fall by approximately 50% to 55% year-on-year, compared with net profit of nearly US$279 million in the same period of 2025. The bank believes the profit decline was mainly affected by factors including fluctuating demand in the footwear manufacturing business, tariffs, macroeconomic uncertainty, rising labor costs due to an increase in headcount and wage hikes, and uneven capacity utilization. Morgan Stanley estimates that YUE YUEN IND's third-quarter net profit will range from approximately US$53 million to US$67 million, equivalent to 47% to 59% of the bank's second-half net profit forecast and 45% to 57% of the market's second-half forecast. Third-quarter net profit is expected to fall 37% to 50% year-on-year, with a median decline of 44%, broadly in line with the bank's forecast of a 45% decline in second-half net profit and the market's expectation of a 43% decline. Given that third-quarter performance was in line with expectations and the market has already digested the relevant negative factors, the bank believes the short-term pressure from the profit warning on the company's share price may be limited.