CHOW TAI FOOK(HK:01929) Shanxi Securities·2025-07-28 10:21Investment Rating - The report maintains an investment rating of "Synchronize with the market" for the textile and apparel industry [1] Core Insights - The textile and apparel industry has shown a mixed performance in recent months, with notable developments in the jewelry sector, particularly for Chow Tai Fook, which reported a narrowing decline in same-store sales [3][19] - The retail value for Chow Tai Fook in FY26Q1 decreased by 1.9% year-on-year, with a 3.3% decline in mainland China, while the Hong Kong, Macau, and overseas markets saw a 7.8% increase [19] - The performance of gold products in mainland China has been strong, contributing positively to sales gross margins, with retail value for high-margin priced gold products increasing by 20.8% year-on-year [20] Summary by Sections 1. Recent Observations - Chow Tai Fook's same-store sales decline has continued to narrow, with a reported 3.3% decrease in mainland China and a 2.2% growth in the Hong Kong and Macau markets [3][5][19] 2. Market Performance - The textile and apparel sector saw a 1.45% increase this week, lagging behind the broader market performance [10][23] - The SW textile manufacturing sub-sector rose by 2.34%, while the apparel and home textile sectors increased by 1.37% [10][24] 3. Company Performance - Chow Tai Fook closed 311 stores in mainland China during FY26Q1, with a total of 5,963 stores remaining in the region [6][22] - The average selling price of gold jewelry in mainland China increased from 6,100 HKD to 6,900 HKD, while the average price for embedded products rose from 8,500 HKD to 9,600 HKD [21] 4. Industry Data Tracking - In the first half of 2025, China's textile and apparel exports saw a slight increase of 1.8%, while furniture exports decreased by 7% [51] - The retail sales of gold and silver jewelry grew by 6.1% year-on-year in June 2025, indicating stable demand in the market [59] 5. Industry News - LVMH reported a 4% decline in total revenue for the first half of 2025, but noted a significant improvement in demand in mainland China [70][71] - Moncler Group's revenue remained stable, with a slight increase of 1% year-on-year, reflecting resilience in the luxury market [73]