Equity Analysis /
Hong Kong

HK : YOFC - 2021 results lower than expected but still on the recovery track

    Mark Po
    Mark Po

    Research Analyst

    29 March 2022
    Published by

    YOFC reported its 2021 results, which were lower than we expected. Owing to reclassification of shipping costs, YOFC reported a gross margin of 19.6% in 2021, down 0.4pp yoy. Despite the lower-than-expected 2021 results, we maintain the view that YOFC is on the recovery track in terms of fundamentals. Successful diversification and internationalization will also drive YOFC’s medium-term growth. We reiterate our ADD rating, with a higher target price of HK$14.48 (based on 12x 2022F P/E). The upward revision in the target price is due to revising up our net profit forecasts.