Daily focus：Luk Fook Group（590）
Luk Fook Group announced its full-year results, reporting revenue of HK$13.341 billion, a decrease of 12.9% compared to the same period last year. This decline was mainly due to international gold prices repeatedly hitting new highs, which restrained gold product sales. Despite the revenue drop, benefiting from rising gold prices, the gross margin increased from 27.2% to 33.1%, and gross profit rose by 5.8% to HK$4.417 billion. However, the surge in gold prices also led to an expanded gold hedging loss of approximately HK$493 million. Additionally, the previous year recorded a one-off gain from the acquisition of the King Fook Jewellery Group, resulting in an operating profit decline of 33.3% to HK$1.412 billion, with the operating profit margin dropping from 13.8% to 10.6%..
Deterioration in US-Canada Tariff Negotiations
After expanding for three consecutive months, US May consumer spending reversed, with personal consumption expenditures (PCE) decreasing by 0.1% month-on-month, below the expected increase of 0.1% and the prior increase of 0.2%. Meanwhile, the US May core PCE price index rose 2.7% year-on-year, higher than the expected 2.6%, marking the highest level since February 2025. The core PCE price index also rose 0.2% month-on-month, above the market expectation of 0.1%. Additionally, due to Canada’s decision to impose a Digital Services Tax (DST) on US tech companies, the US will immediately terminate all trade negotiations with Canada and notify Canada within the next seven days of imposing new tariff rates on Canadian exports to the US.
On Friday, Hong Kong Stock Connect recorded a net inflow of HKD 3.04 billion. Construction Bank (939) saw the largest net inflow, reaching HKD 1.34 billion, followed by Semiconductor Manufacturing International Corporation (SMIC, 981). Xiaomi Group (1810) experienced the largest net outflow, amounting to HKD 3.25 billion, followed by Alibaba (9988).
China’s official manufacturing PMI for June slightly exceeded expectations, but Hong Kong stocks were soft in the morning session. The Hang Seng Index opened down 9 points and closed the day down 212 points, or 0.9%, at 24,072. The China Enterprises Index fell 84 points, or 0.96%, to 8,678. The Hang Seng Tech Index dropped 38 points, or 0.7%, to 5,303. Total market turnover for the day was HKD 242.2 billion. LAOPU GOLD (6181) continued its upward trend, rising 14.9% to HKD 1,008. Emperor International Holdings (163) disclosed a debt default, and its stock price fell by 11%.
Source: KGI Investment Products and Solutions Department
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