Xinda Securities·2026-01-22 00:25Investment Rating - The investment rating for Chow Tai Fook (1929.HK) is not explicitly stated in the provided documents, but the overall sentiment appears positive based on the performance metrics discussed [1]. Core Insights - Chow Tai Fook reported a retail value increase of 17.8% year-on-year for the period of October to December 2025, with the mainland China market growing by 16.9% and markets outside mainland China by 22.9% [1]. - Same-store sales in mainland China increased by 21.4% year-on-year, while sales outside mainland China rose by 14.3%, indicating an acceleration in growth compared to the previous quarter [2]. - The proportion of priced jewelry significantly increased, with a year-on-year growth of 53.4% for priced jewelry and 13.1% for gold jewelry, leading to a retail share of 40.1% for priced jewelry, which is expected to support margin improvements [2]. - The company is focusing on brand transformation and has introduced new products, including collaborations with Disney, which may enhance consumer engagement and sales [2]. - Chow Tai Fook plans to optimize its domestic channels and expand internationally, with a goal to open new stores in high-end locations by June 2026 [3]. Financial Summary - For FY2025, Chow Tai Fook's revenue was HKD 89.656 billion, with a projected increase to HKD 94.115 billion in FY2026, representing a 5% growth [4]. - The net profit attributable to shareholders for FY2025 was HKD 5.916 billion, expected to rise to HKD 8.760 billion in FY2026, reflecting a 48% increase [4]. - Earnings per share (EPS) is projected to grow from HKD 0.59 in FY2025 to HKD 0.89 in FY2026 [4]. - The company’s gross margin is expected to improve from 29.51% in FY2025 to 32.22% in FY2026 [6]. Operational Metrics - Chow Tai Fook's total number of stores in mainland China was 5,433 at the end of December 2025, with a net closure of 230 stores during the same period [3]. - The company is enhancing store quality and efficiency, with new store designs performing better than traditional stores [3]. - The cash flow from operating activities is projected to significantly increase to HKD 13.431 billion in FY2026 from HKD 299 million in FY2025 [6].