According to DBS Weigao, Oriental Watch Group (0398.HK) previously announced that its medium-term net profit had more than doubled to HK$70.5 million. After converting the interim profit into an annualized rate, the corresponding expected price-earnings ratio slightly exceeded 12 times, which is still lower than other jewelry and watch retailers in Hong Kong, such as Chow Sang Sang Sang (0116.HK) and Lukfook Group (0590.HK).

DBS Weigao raised Oriental Watch Bank's target price from HK$3.84 (equivalent to 9 times price-earnings ratio) to HK$5.45 (equivalent to 12 times price-earnings ratio), maintaining the stock's buying rating.

The bank said that Oriental Watch Bank will still benefit from the prosperity of the Hong Kong and mainland luxury goods markets in the medium term, and the valuation gap with peers is expected to narrow further.

Oriental Watch Group dropped 1.39% yesterday to close at HK$4.26.