CHOW TAI FOOK(01929) 国泰君安·2024-07-24 07:01Investment Rating - The report maintains a rating of "Buy" for Chow Tai Fook (1929) [1][3]. Core Views - The operating performance for FY2025 Q1 met expectations, with a significant increase in the contribution from priced gold, which doubled in growth. The report anticipates an improvement in profit margins for FY2025 due to the rising contribution from priced gold and inventory appreciation from higher gold prices [2][3]. Summary by Sections Financial Performance - The company expects net profit attributable to shareholders for FY2025, FY2026, and FY2027 to be HKD 74.20 billion, HKD 82.09 billion, and HKD 90.85 billion respectively, with corresponding EPS of HKD 0.74, HKD 0.82, and HKD 0.91. A PE ratio of 15 times is applied for FY2025, resulting in a target price of HKD 11.13 [3]. - For FY2025 Q1, the retail value decreased by 20.0% year-on-year, with a decline of 18.6% in mainland China and 28.8% in Hong Kong, Macau, and other markets. Same-store sales in mainland China and Hong Kong also saw declines due to high gold price volatility affecting demand [3]. Product Performance - The demand for gold jewelry has shown a temporary slowdown due to high price volatility, while priced gold products have benefited from exquisite design and craftsmanship, leading to a year-on-year retail value increase of over 100% in mainland China for FY2025 Q1. The contribution of priced gold retail value rose from 6% in FY2024 Q1 to 16% in FY2025 Q1 [3]. - In terms of product categories, same-store sales for embedded jewelry, platinum, and K-gold jewelry in mainland China decreased by 31.7%, while the average selling price increased from HKD 7,800 to HKD 8,600. Gold jewelry and products saw a same-store sales decline of 27.9%, with average selling prices rising from HKD 5,400 to HKD 6,200 [3]. Market Data - The current stock price is HKD 7.91, with a market capitalization of HKD 79,003 million. The stock has traded between HKD 7.91 and HKD 13.54 over the past 52 weeks, with a total share count of 9,988 million [4].