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<Research>BOCI: Sector Decline Excessive After CN Announces New VAT Regulation on Gold; CHOW TAI FOOK/ LUK FOOK HOLD Still Liked
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After the Chinese government announced a new VAT regulations on gold, the stock prices of gold jewelry retailers significantly retreated, BOCI released a research report saying. Although the broker expected the policy might have a mild negative impact on industry profits, with a mid-single-digit decline in EPS anticipated, BOCI believed that the current stock price correction is excessive, mainly due to the combined effects of other factors, such as falling gold prices and profit taking amid the US government shutdowns. BOCI remained optimistic about CHOW TAI FOOK (01929.HK) and LUK FOOK HOLD (00590.HK), with both rated at Buy and target prices of $17.8/ $23.8 respectively. It is anticipated that the upcoming interim results of both companies may alleviate investor concerns. AASTOCKS Financial News Website: www.aastocks.com |
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