Luk Fook Holdings (International) (0590) AI Stock Analysis

• Market Cap: HK$13.80B
• Dividend Yield: 5.06%
• Average Volume (3M): 1.57M
• Price to Earnings (P/E): 12.5
• Beta (1Y): 0.58
• Revenue Growth: -12.95%
• EPS Growth: -37.76%
• Country: HK
• Employees: 6,600
• Sector: Consumer Cyclical
• Sector Strength: 71
• Industry: Luxury Goods
• EPS (TTM): 1.13
• Shares Outstanding: 587,107,850
• 10 Day Avg. Volume: 1,885,875
• 30 Day Avg. Volume: 1,566,535
• PEG Ratio: -0.22
• Price to Book (P/B): 0.68
• Price to Sales (P/S): 0.67
• P/FCF Ratio: 11.56
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$24.60
• Price Target Upside: 4.67% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 76 Outperform
• Price Target: HK$23.50 ▲(0.00% Upside)

Luk Fook Holdings' strong financial performance, characterized by robust revenue growth and healthy profit margins, is a significant strength. The stock's valuation is attractive, with a low P/E ratio and high dividend yield, enhancing its appeal. Technical indicators suggest stable market conditions, although some caution is warranted due to mixed cash flow performance and potential oversold conditions.

Positive Factors

Dividend Yield

The company offers an attractive dividend yield of over 5%, with a commitment to paying a significant portion of earnings as dividends.

Earnings

Solid 1Q FY26 recovery underscores a positive outlook: revenue +13% y/y with fixed-price gold sales surging 73%, and SSS turning around to +5%.

Expansion Strategy

Luk Fook’s 3-year plan targets overseas expansion, product innovation, and operational efficiency via automation/AI.

Negative Factors

Gold Hedging

Gold hedging losses could affect reported profits, but adjusted earnings should remain supportive.

High Gold Prices

Luk Fook's FY25 revenue declined due to high gold prices, which dampened gold product sales.

Weather Impact

Early Aug 2025 retail sales were hit by severe weather disruptions in HK/Macau and Guangdong, including black rains and flooding.

Luk Fook Holdings (International) Business Overview & Revenue Model

Company Description

Luk Fook Holdings (International) Limited, an investment holding company, engages in sourcing, designing, wholesaling, trademark licensing, and retailing various gold and platinum jewelry, and gem-set jewelry products. It is also involved in gold bullion trading; wholesaling polished diamonds; property holding; wholesaling and retailing watches; electronic retailing of gold and jewelry products; and the provision of quality examination services, as well as the authentication of gemstones. The company provides software development and internet related services, as well as engages in the brand building and promotion activities. As of March 31, 2022, it operated a total of 2,809 shops including 2,719 Lukfook shops, 84 Goldstyle, 2 Lukfook Joaillerie shops, 3 Heirloom Fortune shops, and 1 Dear Q shop in Hong Kong, Macau, Mainland China, Singapore, Malaysia, Cambodia, the Philippines, the United States, Laos, Canada, and Australia. The company was founded in 1991 and is headquartered in Sha Tin, Hong Kong.

How the Company Makes Money

Luk Fook Holdings generates revenue primarily through the sale of its jewelry products across its extensive retail network. Key revenue streams include direct sales from physical stores, online sales through its e-commerce platform, and wholesale distribution to other retailers. The company benefits from high demand for gold and diamond jewelry, particularly in festive seasons and special occasions. Significant partnerships with suppliers and manufacturers ensure a steady supply of quality materials, allowing Luk Fook to maintain competitive pricing and product offerings. Additionally, the company's branding and marketing efforts enhance customer loyalty and drive repeat purchases, contributing to overall earnings.

Luk Fook Holdings (International) Financial Statement Overview

Summary

Luk Fook Holdings demonstrates strong financial health across all verticals. The company has achieved impressive revenue and profit growth, underpinned by solid operational efficiency. The balance sheet is robust with low leverage and a high equity ratio, providing financial stability. Cash flows are generally strong, though there's room for improvement in Free Cash Flow management. Overall, the company's financial statements reflect a well-managed business with a strong growth trajectory and sound financial footing.

Income Statement

Luk Fook Holdings has shown strong revenue growth with a 27.99% increase from the prior year. The company maintains solid profitability, evidenced by a Gross Profit Margin of 27.23% and a Net Profit Margin of 11.53% for the latest year. EBIT and EBITDA margins are also robust at 13.81% and 17.02% respectively, indicating efficient operational management. Overall, the income statement reflects strong revenue growth and solid profitability, supporting a high score.

Balance Sheet

The balance sheet of Luk Fook Holdings reveals a healthy financial position with a low Debt-to-Equity Ratio of 0.16, indicating low leverage. The Equity Ratio stands strong at 76.50%, showing a high proportion of assets financed by equity. However, the Return on Equity (ROE) is at 13.71%, which while healthy, suggests room for improving asset utilization for better returns. The balance sheet is stable with low leverage and high equity, but moderate ROE slightly impacts the score.

Cash Flow

The cash flow analysis shows a positive Free Cash Flow of 986.53 million HKD. The Operating Cash Flow to Net Income Ratio is 0.94, indicating efficient conversion of income to cash. However, Free Cash Flow has declined compared to the previous year, suggesting potential areas for improvement in cash management. The cash flow remains strong overall, with efficient operations supporting a high score, though with some caution due to declining Free Cash Flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	13.29B	13.34B	15.33B	11.98B	11.74B	8.86B
Gross Profit	3.87B	4.42B	4.17B	2.86B	2.80B	2.11B
EBITDA	1.78B	2.04B	2.61B	1.98B	2.17B	1.83B
Net Income	1.26B	1.10B	1.77B	1.28B	1.39B	1.02B
Balance Sheet
Total Assets	17.09B	17.90B	16.85B	14.93B	16.22B	14.51B
Cash, Cash Equivalents and Short-Term Investments	1.93B	1.91B	2.00B	2.35B	3.49B	3.55B
Total Debt	2.04B	2.81B	2.03B	860.20M	2.31B	1.51B
Total Liabilities	3.93B	4.76B	3.99B	2.71B	4.14B	3.19B
Stockholders Equity	13.22B	13.20B	12.89B	12.22B	12.08B	11.32B
Cash Flow
Free Cash Flow	1.90B	777.34M	986.53M	1.25B	358.04M	2.36B
Operating Cash Flow	2.01B	919.20M	1.66B	1.36B	813.52M	2.50B
Investing Cash Flow	-213.11M	-182.48M	-777.34M	-97.56M	-487.13M	-269.25M
Financing Cash Flow	-2.23B	-805.04M	-1.26B	-2.30B	-447.37M	-1.53B

Luk Fook Holdings (International) Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 23.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0590, the sentiment is Positive. The current price of 23.5 is above the 20-day moving average (MA) of 21.73, above the 50-day MA of 20.93, and above the 200-day MA of 16.64, indicating a bullish trend. The MACD of 0.77 indicates Negative momentum. The RSI at 67.34 is Neutral, neither overbought nor oversold. The STOCH value of 82.79 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0590.

Luk Fook Holdings (International) Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0590	76 Outperform	HK$13.80B	12.54	8.44%	5.06%	-12.95%	-37.76%
Sector *	64 Neutral	€7.46B	14.78	11.67%	3.51%	0.79%	-59.40%
CEBTF	―	$205.67M	65.56	-6.53%	―	―	―
CHOWF	―	$757.58M	7.86	6.25%	10.78%	―	―
CJEWF	―	$17.77B	23.82	22.73%	3.64%	―	―
EPRJF	―	$329.04M	8.65	4.99%	1.36%	―	―
ORWHF	―	$212.27M	9.66	11.32%	13.11%	―	―

Luk Fook Holdings (International) Corporate Events

Luk Fook Holdings Clarifies Director’s Involvement in China South City Winding-Up

Luk Fook Holdings (International) Limited announced an update regarding Mr. HUI Chiu Chung, a Non-executive Director, who was involved with China South City Holdings Limited, a company ordered to wind up by the High Court of Hong Kong. Despite Mr. HUI’s association with China South City, the winding-up order will not impact Luk Fook Holdings’ operations or Mr. HUI’s role within the company.

Luk Fook Holdings Announces 2025 Annual General Meeting

Luk Fook Holdings (International) Limited has announced its Annual General Meeting to be held on August 21, 2025. Key agenda items include reviewing the financial statements, declaring a final dividend, re-electing directors, and re-appointing auditors. Additionally, the company seeks approval to allow directors to issue new shares, with certain limitations, to enhance operational flexibility and support potential growth initiatives.

Luk Fook Holdings Sees Strong Q1 Growth Driven by Fixed-Price Gold Sales

Luk Fook Holdings reported a strong first quarter for the financial year ending March 2026, with retail sales value and revenue increasing by 13% and 14% year-on-year, respectively. The Mainland market showed robust growth, while Hong Kong, Macau, and overseas markets also improved. The company’s focus on fixed-price gold products contributed to a 73% rise in same-store sales for these items, despite a challenging international gold price environment.

Luk Fook Holdings Reports Revenue Decline Amid High Gold Prices

Luk Fook Holdings (International) reported a 12.9% decrease in revenue to HK$13.3 billion for the year ended March 31, 2025, mainly due to a decline in gold product sales amid record-high gold prices. Despite this, the company saw a 5.9 percentage point increase in gross profit margin to 33.1%, with gross profit rising by 5.8% to HK$4.42 billion. However, profit for the year fell by 39.3% to HK$1,068 million, impacted by widening gold hedging losses and the absence of a one-off gain from the previous year’s acquisition. The company proposed a final dividend of HK$0.55 per share and reported a net decrease of 296 shops. Notably, same-store sales in the Mainland market improved by nearly 20%, while the Hong Kong and Macau market remained stable.

Luk Fook Holdings Announces Final Dividend for FY2025

Luk Fook Holdings (International) Limited has announced a final cash dividend of HKD 0.55 per share for the financial year ending 31 March 2025. The dividend will be paid on 10 September 2025, following shareholder approval on 21 August 2025. This announcement reflects the company’s commitment to returning value to its shareholders and may positively impact its market positioning by demonstrating financial stability and shareholder confidence.

Luk Fook Holdings Enhances Governance with New Audit Committee

Luk Fook Holdings (International) Limited has established an Audit Committee to enhance its corporate governance framework. The committee will consist of at least three non-executive directors, with a majority being independent non-executive directors. The committee is tasked with overseeing financial reporting and ensuring compliance with regulatory requirements, which is expected to strengthen the company’s internal controls and provide greater transparency to stakeholders.

Luk Fook Holdings Forms Nomination Committee to Strengthen Governance

Luk Fook Holdings (International) has established a Nomination Committee to oversee board appointments and succession planning. The committee, comprising a majority of independent non-executive directors, is tasked with ensuring diversity and effective governance, which may enhance the company’s strategic decision-making and stakeholder confidence.

Luk Fook Holdings Issues Profit Warning Amid Gold Hedging Losses

Luk Fook Holdings (International) Limited has issued a profit warning, indicating a projected 40% decrease in profit for the fiscal year ending March 2025. This decline is mainly due to increased gold hedging losses and a high base effect from last year’s acquisition-related gains. However, excluding these factors, the profit decline narrows significantly. Despite this, the company has reported double-digit growth in same-store sales in Mainland China from April to May 2025, driven by effective branding and product strategies, while sales in Hong Kong and Macau remained stable. The company anticipates potential improvement in business performance for the remainder of the fiscal year.

Luk Fook Holdings to Announce Annual Results and Dividend Consideration

Luk Fook Holdings (International) Limited has announced that its board of directors will convene on June 26, 2025, to approve and publish the company’s annual results for the fiscal year ending March 31, 2025. The meeting will also consider the recommendation of a final dividend, potentially impacting shareholder returns and reflecting the company’s financial health and strategic direction.