Zhi Tong Cai Jing·2025-11-26 03:44Core Viewpoint - Zhongyin International reports that Chow Tai Fook's strategic transformation is showing success, with expectations of gaining more market share across all business segments. The "Buy" rating is reiterated, and the target price is raised from HKD 17.8 to HKD 18.1, reflecting a forecasted price-to-earnings ratio of 20.8 times for the fiscal year 2026 [1] Group 1 - Chow Tai Fook's financial performance for the first half of the fiscal year ending September 2026 appears modest, with revenue and net profit declining by 1.1% and increasing by 0.1% year-on-year, respectively [1] - Strategic adjustments have significantly improved the average sales per store, with same-store sales growth in mainland China showing a remarkable increase of 35.1% from October 1 to November 18, 2025, indicating strong growth momentum despite challenges [1] Group 2 - Due to unexpected increases in gold prices, Chow Tai Fook has raised its gross margin and operating profit margin guidance, anticipating more manageable hedging losses in the second half of fiscal year 2026, with limited impact from recent VAT policy changes [2] - Core net profit forecasts for Chow Tai Fook for fiscal years 2026 to 2028 have been increased by 7%, 2%, and 3%, respectively, reflecting the latest guidance and expectations of more favorable gold price trends [2] - The group is expected to benefit from improved same-store sales growth in the second half of fiscal year 2026 and into fiscal year 2027, leading to profit growth and maintaining its leadership position in the Chinese jewelry industry [2]