Investment Rating - The report maintains a "Buy" rating for Chow Tai Fook [6] Core Views - Chow Tai Fook's FY2026 Q1 same-store sales decline continues to narrow, with expectations for ongoing improvement [1] - The company is focusing on optimizing product structure and closing underperforming stores, which is expected to enhance sales performance [2] - E-commerce sales have shown strong growth, with a 27% year-on-year increase in FY2026 Q1 [2] - The company anticipates a 3% revenue growth for FY2026, with a slight decline in operating profit [3] Summary by Sections Financial Performance - For FY2026 Q1, Chow Tai Fook's overall RSV decreased by 1.9%, with mainland China RSV down by 3.3% [1] - The company closed 311 underperforming stores, bringing the total to 5,963 stores in mainland China [1] - The retail sales of gold products increased by 20.8%, contributing to the improvement in same-store sales [1] E-commerce Growth - Chow Tai Fook's e-commerce sales in mainland China grew by 27% year-on-year, accounting for 7.6% of total sales [2] - The company is leveraging promotional events like the 618 sales to boost e-commerce performance [2] Regional Performance - In FY2026 Q1, sales in Hong Kong and Macau increased by 7.8%, with Macau showing a notable 9.5% growth in same-store sales [2] Revenue and Profit Forecast - The company expects FY2026 revenue to grow by approximately 3%, while operating profit is projected to decline by 2% to HKD 14.4 billion [3] - Chow Tai Fook's net profit for FY2026 is forecasted to increase by 26% to HKD 7.45 billion [3]

Group 1 - The core viewpoint of the report is that the company maintains its EPS forecast for FY26/27 at HKD 0.84/0.92, with a target price increase of 8% to HKD 16.11, indicating a 15% upside potential from the current stock price [1] - The company reported a 1.9% year-on-year decline in overall retail value for 1QFY26, with a 3.3% decline in same-store sales in mainland China, while the Hong Kong and Macau markets saw a 2.2% increase in same-store sales [2][3] Group 2 - The sales improvement in the quarter was attributed to the growth in sales of priced jewelry products and a low base effect, with mainland China retail sales down 3.3%, but showing improvement from a previous decline of 10% [3] - The company optimized its store operations, closing 311 stores in mainland China during 1QFY26, which contributed to the same-store sales improvement [3] - In the Hong Kong and Macau markets, retail sales increased by 7.8%, with same-store sales in Hong Kong growing by 0.2% and in Macau by 9.5% [3] Group 3 - In terms of product performance, gold products continued to outperform embedded products, with a 21% year-on-year increase in sales of priced gold during 1QFY26 [4] - The same-store sales for gold products in mainland China decreased by 1.4%, while embedded products saw a 2.2% decline, both showing significant narrowing of declines compared to previous quarters [4] - In the Hong Kong and Macau markets, same-store sales for gold products increased by 6.6%, and for embedded products by 3.3% [4] Group 4 - The company is continuing its brand transformation strategy, opening new image stores in mainland China and Macau, and launched a high-end jewelry series in June in Hangzhou to enhance brand positioning [5] - The "Chuanxi" series has achieved cumulative sales exceeding HKD 500 million since its launch in April 2025, continuing the strong growth trend of previous series [5] - The collaboration with streetwear brand CLOT has gained popularity among younger consumers, indicating successful product innovation [5]

Core Insights - Chow Tai Fook reported a 2.2% increase in same-store sales in Hong Kong and Macau for the first quarter [1] - The overall retail value for the first quarter saw a year-on-year decline of 1.9%, with Hong Kong and Macau markets increasing by 7.8% while mainland China experienced a 3.3% drop [1] Retail Performance - Same-store sales in Hong Kong grew by 0.2%, while Macau saw a significant increase of 9.5% [1] - In mainland China, same-store sales decreased by 3.3%, although the decline has narrowed compared to previous periods [1] - Franchise stores in mainland China reported flat same-store sales [1]

Core Viewpoint - Chow Tai Fook (01929) reported a 1.9% year-on-year decline in retail value for the first quarter ending June 30, 2025, with mainland China experiencing a 3.3% drop, while Hong Kong, Macau, and other markets saw a 7.8% increase [1]. Group 1 - The same-store sales performance in major markets continued to improve compared to previous quarters, driven by the growth of priced products and a low base effect [1]. - In mainland China, the same-store sales decline narrowed to 3.3% for direct stores, while franchise stores remained flat [1]. - Same-store sales in Hong Kong and Macau increased by 2.2% year-on-year, with Hong Kong up 0.2% and Macau up 9.5% [1]. Group 2 - The average selling price of gold products remained strong, with mainland China's average price rising to HKD 6,900 (from HKD 6,100 in Q1 FY2025), and Hong Kong and Macau's average price increasing to HKD 10,400 (from HKD 9,000 in Q1 FY2025) [1]. - The sales decline for jewelry, platinum, and K-gold in mainland China significantly narrowed due to strong sales of the company's signature products [1]. - The average selling price for jewelry in mainland China rose to HKD 9,600 (from HKD 8,500 in Q1 FY2025), while the average price in Hong Kong and Macau was HKD 15,900 (down from HKD 16,400 in Q1 FY2025) [1]. Group 3 - The company continued to close underperforming stores while selectively opening new, more productive locations [2]. - A net closure of 311 Chow Tai Fook jewelry retail points occurred in mainland China, while a net addition of 1 retail point was made in Hong Kong and Macau [2].

Group 1 - The company Chow Tai Fook (00659.HK) announced that all conditions for the repurchase agreement have been met, and the repurchase was completed on July 18, 2025 [1] - A total principal amount of HKD 566 million of existing convertible bonds has been repurchased, accounting for approximately 72.6% of the initial principal amount [1] - The remaining outstanding principal amount of HKD 74 million has been fully converted into shares, resulting in the issuance of 10,013,530 new shares [1] Group 2 - The board further announced that all conditions for the subscription agreement related to the issuance of bonds have been met, and the subscription and issuance were completed on July 18, 2025 [2] - The bonds have a total principal amount of HKD 850 million and were listed on the Vienna Stock Exchange on July 18, 2025 [2] - The bonds were allocated to no less than six independent subscribers, defined as professional investors under the Securities and Futures Ordinance [2]

Core Viewpoint - The discussion highlights the possibility of negotiating prices when purchasing gold jewelry, which is often overlooked by consumers. Group 1: Consumer Insights - A well-known sales consultant expressed regret over losing a sale due to stubbornness in price negotiation, indicating that minor price differences can lead to significant lost opportunities [1] - Many consumers were surprised to learn that negotiating prices for gold jewelry is possible, with some sharing their successful experiences of obtaining discounts [3][5] - Consumers reported that discounts at gold shops typically range from 10% to 20%, and that competition among stores can be leveraged to negotiate better prices [5] Group 2: Negotiation Techniques - Successful negotiation often involves showing genuine interest and asking for the lowest possible price, with some consumers suggesting that mentioning competitor prices can help in negotiations [9] - The experience of negotiating prices is likened to bargaining in a market, where being bold can lead to savings [13] - It is noted that not all gold shops allow for price negotiation, with some items being fixed-price, which can make it easier to negotiate on certain products [11]

Group 1 - The "Bilibili World 2025" (BW2025) exhibition in Shanghai has gained immense popularity, with nearly 900,000 people attempting to purchase tickets, leading to rapid sellouts [1][3] - The exhibition features a diverse range of sponsors, including brands like Chow Tai Fook and China Construction Bank, which are not traditionally associated with the ACGN (Animation, Comic, Game, Novel) culture [2][7] - The event is part of a broader trend in the booming ACGN market in China, which has over 500 million users, predominantly young individuals under 35 years old [2][13] Group 2 - The BW2025 exhibition has seen a 30% increase in both venue size and ticket availability compared to previous years, attracting around 700 exhibitors and over 1,000 global content creators [5][6] - The event has significantly boosted local tourism and consumption, with hotel bookings around the exhibition area tripling compared to the previous week [5] - The exhibition's sponsors are primarily consumer-facing brands, with about 80% targeting end-users in sectors like food, beauty, and automotive [8][11] Group 3 - The rapid growth of the ACGN market is evident, with projections estimating the market size to reach 597.7 billion yuan in 2024 and 834.4 billion yuan by 2029 [2][13] - The demographic of the ACGN audience is heavily skewed towards younger individuals, with 70% of Bilibili's users aged between 18 and 30 [17][18] - Brands are increasingly recognizing the purchasing power of young women, who are seen as a key demographic in the ACGN community [18]

Group 1 - Company proposes to repurchase HKD 780 million 4.00% convertible bonds maturing in 2025 [1] - As of the announcement date, the company has received commitments from eligible bondholders to sell approximately HKD 566 million of existing convertible bonds [1] - The remaining outstanding principal amount of existing convertible bonds is approximately HKD 74 million [1] Group 2 - Company plans to issue HKD 850 million 2.80% convertible bonds maturing in 2027 [2] - The initial conversion price is set at HKD 7.67 per share, potentially converting into approximately 110.8 million new shares, representing about 2.686% of the enlarged issued share capital [2] - Net proceeds from the bond issuance are expected to be approximately HKD 843 million, with around HKD 571 million allocated for the repurchase and the remainder for general corporate purposes [2]

Group 1 - The company Chow Tai Fook has successfully issued HKD 8,800,000,000 in 0.375% convertible bonds maturing in 2030 [1]

Core Viewpoint - The company expects a revenue and net profit decline of 17.5% and 9.0% respectively for FY25, primarily due to high gold prices suppressing end demand, with a narrowing decline in FY25H2 [1][2] Revenue and Profit Performance - FY25 revenue reached HKD 896.6 billion, down 17.5%, with operating profit at HKD 147.5 billion, up 9.8%, and net profit at HKD 59.2 billion, down 9.0% [1][2] - Revenue for FY25H1 and FY25H2 was HKD 394.1 billion (-20.4%) and HKD 502.5 billion (-15.1%) respectively, while net profit for the same periods was HKD 25.3 billion (-44.4%) and HKD 33.9 billion (+73.8%) [2] Regional Performance - Revenue in mainland China for FY25 was HKD 745.6 billion, down 16.9%, with retail and wholesale channel revenues at HKD 323.6 billion (-16.1%) and HKD 422.0 billion (-17.5%) respectively [2] - Same-store sales in mainland China declined by 19.4%, with quarterly declines improving from -26.4% in Q1 to -13.2% in Q4 [2] Product Performance - The share of fixed-price gold and gold-inlaid products increased significantly, with revenue from fixed-price gold jewelry reaching HKD 127.8 billion, up 104.5%, accounting for 14.6% of retail sales [3] - Revenue from weight-based gold jewelry products fell to HKD 579.6 billion, down 29.4%, while diamond-inlaid products generated HKD 125.2 billion, down 13.3% [3] Store Optimization - The company optimized its store network, ending FY25 with 6,644 stores, a net decrease of 842 stores, while opening high-quality and image stores [4] - The company plans to open 20 new image stores in FY26 across mainland China, Hong Kong, and other international markets [4] Margin and Profitability - The gross margin improved to 29.5%, up 5.5 percentage points, driven by rising gold prices and an increased share of fixed-price products [5] - The company incurred a loss of HKD 61.8 billion from gold lending hedging, which accounted for 6.9% of revenue, impacting the net margin, which was 6.7%, up 0.6 percentage points [5] Future Outlook - Retail value decline is expected to narrow to low single digits in April-May 2025, with a potential improvement in terminal demand [7] - Revenue forecasts for FY26-28 are HKD 937.9 billion, HKD 986.9 billion, and HKD 1,049.5 billion, with net profits of HKD 78.3 billion, HKD 86.2 billion, and HKD 95.4 billion respectively [8]