The analyst rating for YUE YUEN IND was downgraded from Buy to Hold due to several factors. The company experienced a 4.6% year-over-year decline in OEM revenue for the fourth quarter of 2025, primarily driven by an 8.1% drop in shipment volume, although this was partially offset by a 5.2% increase in average selling price. The management expressed cautious views on the OEM business outlook, indicating that average selling prices and sales volumes in 2026 may remain flat to slightly softer, with order visibility weakening to about 2-3 months. Despite YUE YUEN IND's strong share price performance relative to its OEM peers since April 2025, the broker deemed the stock's valuation reasonable compared to its peers and adopted a more cautious stance on shoemakers compared to apparel OEMs for 2026, leading to the downgrade and a reduction in the target price from $19.25 to $16.8.
