CMS·2025-11-26 07:13Investment Rating - The report maintains a "Strong Buy" rating for Chow Tai Fook [2][7] Core Views - Chow Tai Fook's FY26H1 revenue decreased by 1.1% year-on-year, while net profit increased by 0.1%. The company declared an interim dividend of HKD 0.22 per share, with a payout ratio of 85.7% [6][7] - Strong terminal growth was observed from October 1 to November 18, with same-store sales in mainland China increasing by 38.8%, driven by a 93.9% increase in priced jewelry and a 23.0% increase in gold jewelry [6][7] - The company is expected to benefit from rising gold prices in the second half of the fiscal year, leading to an upward revision of profit forecasts for FY2026 to FY2028 [7] Financial Performance Summary - FY26H1 revenue was HKD 389.9 billion, with a breakdown showing mainland China revenue at HKD 321.9 billion (down 2.5%) and Hong Kong, Macau, and other markets at HKD 67.9 billion (up 6.5%) [6] - The company closed 611 underperforming stores while opening 8 new flagship stores, focusing on enhancing store quality and optimizing the retail network [6] - The gross margin for FY26H1 was 30.5%, with a slight year-on-year decrease of 0.9 percentage points, while operating profit margin reached a five-year high of 17.5% [6][7] Earnings Forecast and Valuation - Revenue projections for FY2026 to FY2028 are HKD 94.001 billion, HKD 98.800 billion, and HKD 104.748 billion, respectively, with net profit estimates of HKD 8.707 billion, HKD 9.804 billion, and HKD 10.864 billion [7][8] - The current market capitalization corresponds to a FY26 PE ratio of 17.5X, indicating a favorable valuation [7][8]