Brookie Shares Climb After Citi Upgrades Forecast on Strong H1 Earnings

Shares of Brookie (00325.HK) gained in Hong Kong trading after Citigroup raised its earnings forecast for the toy manufacturer, citing a stronger-than-expected first-half performance fueled by overseas expansion and improved profit margins. The stock rose nearly 3%, trading up 2.3% at HK$75.5 on a turnover of HK$3.32 million, according to market data.

Strong First-Half Performance

The positive analyst note followed Brookie's recent disclosure of its interim financial results. The company reported a 32.7% year-over-year increase in revenue to RMB 1.776 billion and a 30.5% rise in net profit to RMB 387 million for the six-month period.

According to the company's filing, this growth was primarily driven by its building block character toys, which saw a 26.5% increase in sales volume and a 19.6% rise in revenue. The results reflected sustained volume growth amid stable pricing. A key driver was the company's low-price point products (retailing at RMB 9.9), which sold 77.5 million units and accounted for 47.6% of total sales volume.

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Citigroup Lifts Forecast

In a research report published after the earnings release, Citigroup analysts upgraded their earnings projections for Brookie. The bank attributed the revision to the company's overseas expansion and profit margin performance, which both surpassed expectations.

Citi stated that Brookie now has a "clearer trajectory" toward its annual growth targets, as its strategic initiatives in international markets, new product categories, and intellectual property (IP) diversification are proving effective.