Lung Fung Group Shares Surge Over 5% on Strong Quarterly Sales and DBS 'Buy' Rating

Shares of Lung Fung Group (HKEX: 02290) have risen more than 5% in today's trading session.

At the time of writing, the stock was up 5.12% to HK$3.9, with a trading turnover of approximately HK$12.48 million.

Key Financial Performance

The company recently reported its financial results for the first quarter ending June 30.

Retail sales for the period reached HK$830 million, representing a year-on-year increase of 21.2%.

Comparable same-store sales also grew by 10.3%.

Management noted that while retail sales in June were affected by persistent rainy weather, overall performance was supported by increased customer traffic and an expansion of the retail network.

As of the end of June, the company operated 31 stores, an increase of four compared to the same period last year.

Analyst Coverage and Outlook

DBS Bank has initiated coverage on the stock with a "Buy" rating and a target price of HK$7.98.

The bank's research forecasts the company's core earnings for the fiscal years ending March 2027 and 2028 to be HK$361 million and HK$423 million, respectively.

DBS highlighted that the stock's valuation, trading at 5.6 times the estimated price-to-earnings ratio for the 2027 fiscal year and offering a dividend yield of 10.7%, presents an attractive opportunity for potential re-rating and upside.