Yue Yuen Industrial (0551.HK): Implication of Nike Online Distribution Update After 4QFY26 Results

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Yue Yuen Industrial (0551.HK): Implication of Nike Online Distribution Update After 4QFY26 Results

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01 Jul 2026 06:36:50 ET │ 13 pages

Yue Yuen Industrial (0551.HK)

Implication of Nike Online Distribution Update After 4QFY26 Results

CITI’S TAKE

Nike (covered by Paul Lejuez) released 4QFY26 results which beat but the

Buy outlook guidance on sales was slightly below expectations. Nike has

Price (30 Jun 26 16:10) HK$12.25 received US$986m IEEPA tariff refund over the last quarter. This should

alleviate Nike pricing pressure to YY MFG operation due to recent material Target price HK$19.00

cost inflation. We estimate Nike as the largest customer to YY MFG Expected share price return 55.1%

segment accounting for 45%+ of MFG sales. More importantly, Nike Expected dividend yield 9.1%

remains a committed partner to Pousheng in China per Paul Lejuez Expected total return 64.2%

report. YY share fell 34% since end-Feb which looks overdone, despite its Market Cap HK$19,656M

profit warning for 1Q results and soft demand of athletic shoes. The stock

US$2,507M appears set to bounce. Maintain Buy with ~8x PE and >9% div yld for

2026E.

MFG remains a major contributor than retail to YY group – Per 1Q26 results, MFG Eric LauAC

and retail (under Pou Sheng) constituted for 63% and 37% of total sales. See Fig 1 & +852-2501-2726

2 for MFG and retail quarterly P&L trend. We expect the GM on MFG operation will eric.h.lau@citi.com

expand sequentially thru 2Q-4Q26 thanks to improvement of operating efficiency,

Alice Caiwhich should demonstrate 1Q being the lowest GM.

+852-2501-2704

alice.cai@citi.com

MFG GM expansion looks more promising – Nike tariff recovery would enhance our Andy Li

confidence on projection of GM expansion trend on MFG operation for mitigating +852-2501-2597