Zhi Tong Cai Jing·2025-09-08 03:51Core Viewpoint - The report from CMB International initiates coverage on Chow Tai Fook Enterprises (00659) with a target price of HKD 9.42 and a "Buy" rating, highlighting the growth potential driven by its insurance subsidiary, Chow Tai Fook Life Insurance [1] Group 1: Financial Projections - Chow Tai Fook Enterprises is expected to achieve a compound annual growth rate (CAGR) of 5.6% in revenue from FY2025 to FY2029 [1] - The core profit indicator, Adjusted Operating Profit (AOP), is projected to grow by 4.7% year-on-year in FY2025 and FY2026, reaching HKD 4.36 billion and HKD 4.57 billion respectively, with an acceleration to approximately 8% growth from FY2027 to FY2029 [1] Group 2: Dividend and Cash Flow - The company’s core earnings per share (EPS) dividend is expected to increase from HKD 0.58 to HKD 0.65 from FY2020 to FY2024, with an adjusted EBITDA ranging from HKD 5 billion to HKD 7 billion and a payout ratio of about 35%-40% [1] - Projected core EPS dividends for FY2025, FY2026, and FY2027 are HKD 0.65, HKD 0.68, and HKD 0.71 respectively, translating to dividend yields of 8.4%, 8.8%, and 9.2% based on the closing price of HKD 7.77 on September 2 [1] Group 3: Business Stability and Growth Drivers - Chow Tai Fook Enterprises has experienced stable economic conditions in recent years, benefiting from its stable toll road and logistics businesses, but it is estimated that insurance AOP will surpass other business segments in the next five years [1]