CHOW TAI FOOK(HK:01929) Guotai Junan Securities·2024-10-25 14:15Investment Rating - The report maintains an "Accumulate" rating for Chow Tai Fook [4] Core Views - The operating performance for FY2025Q2 met expectations, with pricing for gold benefiting from a continuous rise in gold prices, leading to an anticipated improvement in profit margins for FY2025 [3] - The report adjusts the forecast for the company's net profit for FY2025-2027 to HKD 59.51 billion, 64.96 billion, and 69.38 billion respectively, down from previous estimates of 63.21 billion, 69.12 billion, and 74.53 billion [4] - The target price is revised down to HKD 9.00 from HKD 9.45, based on a 15x PE for FY2025 [4] Summary by Sections Performance Overview - The company reported a 21.0% year-on-year decline in retail value for FY2025Q2, with a 19.4% decline in mainland China and a 31.0% decline in Hong Kong and Macau [4] - Same-store sales in mainland China and Hong Kong showed a narrowing decline during the Golden Week, indicating a potential recovery trend [4] Gold Pricing and Sales - The demand for priced gold products increased significantly, with the retail value share of priced gold in mainland China rising from 5.0% in FY2024Q2 to 12.8% in FY2025Q2 [4] - The average selling price of gold jewelry increased from HKD 5,600 to HKD 6,400 during the same period [4] Store Count and Market Dynamics - The number of retail points in mainland China decreased by 145, totaling 7,113 as of September 30, 2024 [4] - The report highlights that the sales of embedded jewelry and platinum in mainland China saw a decline of 27.6% in same-store sales [4]