Ge Long Hui·2025-11-28 04:14Core Viewpoint - Chow Tai Fook's mid-term performance shows signs of recovery with improved sales and profitability metrics, indicating a positive outlook for the company's future growth [1][2][3] Financial Performance - For FY26H1, Chow Tai Fook reported revenue of HKD 38.99 billion, a year-on-year decline of 1.1%, but a significant improvement compared to previous periods [1] - Operating profit reached HKD 6.82 billion, up 0.7% year-on-year, with an operating profit margin of 17.5%, marking a 0.3 percentage point increase and a five-year high [1] - The group maintained a gross margin of 30.5%, supported by a higher proportion of high-margin priced jewelry and rising gold prices [1] - The company declared an interim dividend of HKD 0.22 per share, a 10% increase year-on-year, reflecting confidence in future growth [1] Sales Performance - Same-store sales growth (SSSG) for FY26H1 showed positive trends, with mainland China and Hong Kong/Macau recording SSSG of +2.6% and +4.4%, respectively, representing significant year-on-year improvements of 30.0 and 35.2 percentage points [1] - Retail sales of priced jewelry in mainland China increased by 16.1% year-on-year, while gold retail sales declined by 5.8% [2] - The company launched its first high-end jewelry line, "He Mei Dong Fang," enhancing brand positioning and influence [2] Store Network Optimization - Chow Tai Fook is optimizing its store network by closing underperforming stores and opening new concept stores, focusing on improving single-store efficiency and profitability [2] - In FY25H1, the company closed 609 stores, ending the period with 5,663 stores in mainland China and 151 in Hong Kong/Macau [2] - New concept stores achieved an average monthly sales of HKD 1.3 million, a 72% year-on-year increase, indicating improved productivity [2] Market Trends and Future Outlook - Retail growth has accelerated since October, with a 33.9% year-on-year increase in retail value from October 1 to November 18, reflecting a recovery in consumer demand [3] - The implementation of a new gold tax policy in early November may temporarily disrupt demand but is expected to raise industry compliance standards, benefiting leading brands like Chow Tai Fook [3] - Profit forecasts for FY26 to FY28 are set at HKD 81.2 billion, HKD 89.1 billion, and HKD 99.0 billion, representing year-on-year growth of 37.3%, 9.8%, and 11.0%, respectively [3] - The target price is set at HKD 19.4, corresponding to a 24 times PE ratio for FY26, maintaining a "buy" rating [3]