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<Research>BOCI Foresees Retailers to Ride on Rising Gold Prices; LUK FOOK HOLD Top Pick w/ Buy Rating
Recommend 7 Positive 7 Negative 3 |
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In early September 2025, gold prices touched a new high of over USD3,500 per ounce, which may lead the market to be more bullish about gold, BOC International said in a report. According to feedback from gold jewelry retailers, consumers are beginning to adapt to higher gold prices and are more willing to purchase gold jewelry products. The broker foresaw the industry to re-enter a virtuous cycle, with improved store productivity potentially driving store expansion. At the company level, BOC International expected retailers may also benefit from rising gold prices, as their gross margins may expand. However, in light of higher inventory costs, the sharp gross margin expansion seen last year and in 1H25 is unlikely to recur. Among the Buy-rated companies covered by the broker, LUK FOOK HOLD (00590.HK) was expected to be more sensitive to the current bull market cycle given its higher exposure to self-operated retail and markets in Hong Kong, Macau, and overseas, making it the top pick. BOCI's ratings and target prices for select jewelry retailers Stock | Rating | TP CTG DUTY-FREE (01880.HK) | Buy | 70 CHOW TAI FOOK (01929.HK) | Buy | 15.2 LUK FOOK HOLD (00590.HK) | Buy | 23.8 AASTOCKS Financial News Website: www.aastocks.com |
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