UOB: UBS raises Yuexiu Group's (00551.HK) target price to 18 Hong Kong dollars, optimistic about fourth quarter retail sales trends.

According to the WiseFinance APP, UBS released a research report stating that Universal Group (00551.HK) had third-quarter revenue and net profit of $1.957 billion and $108 million, respectively, a year-on-year decrease of 5% and 27%. Retail business revenue increased by 6% year-on-year to 3.743 billion RMB, with a net loss of 17 million RMB. OEM revenue and net profit were $1.434 billion and $109 million, respectively, exceeding the bank's expectations by 62%, mainly due to higher-than-expected gross profit margins. Based on the discounted cash flow (DCF) method, UBS raised Universal's target price from 16 HKD to 18 HKD, as UBS raised its net profit forecast for 2025 to 2027 by 5% to 6% to reflect the higher-than-expected gross profit margin of the OEM business; rated "buy".