CICC Begins Coverage of YUE YUEN IND with Outperform Rating and Target Price of HKD 19.46

The analyst rating of "Outperform" for YUE YUEN IND (00551.HK) is based on the assessment that the company's sports shoe business has significant potential and a concentrated market structure. The report highlights YUE YUEN IND's position as a leading manufacturer in the sports shoe sector and its involvement in the sports apparel retail business. Additionally, the company's development capabilities are seen as a factor that can secure high-quality growth clients, further supporting the positive outlook.

The analyst rating of "Outperform" for YUE YUEN IND (00551.HK) is based on several key factors: 1. Market Leadership: YUE YUEN IND is recognized as the world's largest sports shoe manufacturer, which positions it favorably within the global sports shoe market. 2. Growth Potential: The global sports shoe market is projected to grow at a mid-single-digit rate over the next five years, indicating a stable demand environment. 3. Concentration in the Industry: The concentration of market share among the top brands suggests that YUE YUEN IND, with an estimated shipment share exceeding 10%, is well-placed to benefit from this trend. 4. Retail Expansion: The company's subsidiary, Pou Sheng International, is a leading sports shoe and apparel retailer in Greater China, which enhances its growth prospects in a significant market. 5. Valuation: The target price of $19.46 corresponds to a 10.5x PE ratio for 2026, suggesting that the stock is expected to perform well relative to its earnings potential. Overall, the combination of market leadership, growth potential, and strategic positioning in retail supports the positive analyst rating.

The analyst rating from CLSA is based on the expectation that China's consumption sector will focus on niche market development, with the high-end consumption market benefiting from easing monetary policy, improvements in the stock market, and recovery in offshore financing. They anticipate moderate consumption sentiment and CPI data, while companies are expected to capitalize on opportunities in large-scale niche markets, globalization, and high-end consumption recovery. This outlook has led CLSA to identify specific stocks, such as ANTA SPORTS, YUE YUEN IND, and SAMSONITE, as top picks, while also adjusting target prices for others like POP MART based on anticipated catalysts.