Ge Long Hui·2026-03-04 21:29Core Viewpoint - The performance of Chow Tai Fook in the first half of the fiscal year aligns with expectations, showcasing resilience through a diversified business portfolio and a commitment to gradual dividend growth [1][3]. Financial Performance - For the first half of the fiscal year, Chow Tai Fook recorded a profit attributable to shareholders of HKD 1.334 billion, representing a year-on-year increase of 15%. Total revenue increased by 5.9% to HKD 12.827 billion, driven by strong growth in the insurance business [1]. - The company declared an interim dividend of HKD 0.28 per share, reflecting a year-on-year increase of approximately 3%, with the total interim dividend amount rising by about 6% to HKD 1.27 billion [1]. Business Segment Performance - The financial services segment emerged as the main growth driver, with attributable operating profit increasing by 19% to HKD 729 million, and annualized premium income rising significantly by 48%, while new business value grew by 39% [2]. - The logistics and construction segments faced external challenges, with profits declining by 14% and 21%, respectively. The company plans to optimize its business portfolio, focusing on potential growth areas and continuing to strengthen its financial services as a core pillar [2]. Financial Health - As of the end of 2025, the company has approximately HKD 31 billion in available liquidity, with cash and bank deposits amounting to HKD 20.9 billion, significantly exceeding current liabilities. Debt due within one year decreased by 28% to HKD 6.8 billion, and net debt fell by 6% to HKD 13.8 billion, improving the net debt ratio to 34% [2]. - The average borrowing cost has decreased to approximately 4.0% from 4.2% in the same period last year [2]. Investment Outlook - The company maintains a "Buy" rating with an increased target price of HKD 10.6, supported by its diversified business model and strong performance in the financial services sector. The company is expected to sustain stable growth over the next three years, supporting its progressive dividend policy [3]. - The forecasted adjusted EBITDA for FY26/27/28 is approximately HKD 7.39 billion, HKD 7.75 billion, and HKD 8.02 billion, respectively. The company's re-inclusion in the Hang Seng Composite Index and potential short-term inclusion in the Stock Connect is anticipated to further enhance its valuation [3].