CHOW TAI FOOK(01929) 国泰君安·2024-10-15 00:07Investment Rating - The report maintains an "Accumulate" rating for Chow Tai Fook (1929) [3][12]. Core Views - The report indicates that gold prices continue to rise, which may put pressure on the sales volume of gold by weight. However, the increase in the contribution of priced gold and the appreciation of inventory due to rising gold prices are expected to boost profit margins in FY2025 [3]. - The estimated net profit for Chow Tai Fook for FY2025-2027 has been revised down to HKD 6.321 billion, HKD 6.912 billion, and HKD 7.453 billion respectively, from previous estimates of HKD 7.420 billion, HKD 8.209 billion, and HKD 9.085 billion [3]. - The report projects earnings per share (EPS) for FY2025-2027 to be HKD 0.63, HKD 0.69, and HKD 0.75 respectively, down from previous estimates of HKD 0.74, HKD 0.82, and HKD 0.91 [3]. - The target price has been adjusted to HKD 9.45 from HKD 11.13, based on a price-to-earnings (PE) ratio of 15 times for FY2025 [3]. Summary by Sections Market Performance - From July to September 2024, gold prices have shown strong performance, with domestic gold prices rising from HKD 550 per gram to HKD 598 per gram [3]. - Retail sales in July and August 2024 grew by 2.7% and 2.1% year-on-year, but sales in the gold and jewelry category declined by 10.4% and 12% respectively, underperforming the overall consumer market [3]. Sales and Profitability - The demand for gold by weight is expected to remain under pressure due to high gold prices, while the demand for priced gold is anticipated to benefit from exquisite design and craftsmanship, leading to a potential increase in sales [3]. - The report suggests that the proportion of embedded products may stabilize and increase, benefiting from the sales boost from the "Chuanfu" series, which could drive the sales share of embedded products upward [3]. - The gross profit margin is expected to improve significantly due to the appreciation of inventory from rising gold prices, with a notable profit margin increase projected for FY2025 [3]. Financial Summary - The financial summary indicates that for FY2023, the company reported a revenue of HKD 94.684 billion, with a projected revenue of HKD 93.962 billion for FY2025, reflecting a year-on-year decrease of 13.6% [7]. - The gross profit for FY2023 was HKD 21.171 billion, with a projected gross profit of HKD 21.235 billion for FY2025 [7]. - The net profit for FY2023 was HKD 5.384 billion, with a projected net profit of HKD 6.321 billion for FY2025, indicating a slight decrease of 2.7% [7].