NORTHEAST SECURITIES·2026-01-27 07:15Investment Rating - The report maintains a "Buy" rating for the company, with expectations of significant stock price appreciation over the next six months [5]. Core Insights - The company experienced a strong recovery in Q3 FY2026, with retail sales value (RSV) increasing by 17.8% year-on-year, and same-store sales (SSSG) for direct and franchise stores rising by 21.4% and 26.3% respectively [1][2]. - The product mix is shifting towards high-margin jewelry, with same-store retail value for high-priced jewelry in mainland China growing by 13.7%, contributing 40% to total sales, an increase of 10.7 percentage points year-on-year [2]. - The company is expanding its overseas presence, particularly in Southeast Asia, contributing 15.2% to total retail value, with plans for further expansion in Vancouver and Sydney [3]. Summary by Sections Q3 Performance - In Q3 FY2026, the company achieved a retail sales value of 17.8% year-on-year growth, with mainland China up 16.9% and same-store sales in Hong Kong and Macau growing by 10.1% and 31.3% respectively [1]. Product Strategy - The company is focusing on high-margin products, with the average selling price of gold jewelry in mainland China rising to HKD 11,000, a 50.7% increase year-on-year, and high-priced gold jewelry averaging HKD 9,500, an 82.6% increase [2]. Channel Optimization - The total number of stores reached 5,585 by the end of 2025, with a net closure of 230 stores in mainland China, indicating a structural adjustment nearing completion [2]. - E-commerce sales in mainland China grew by 25% in Q3 FY2026, accounting for 7.4% of RSV, driven by marketing events like Double Eleven [2]. Financial Projections - The company is projected to achieve revenues of 91.93 billion, 96.58 billion, and 101.67 billion yuan for FY2026, FY2027, and FY2028 respectively, with net profits of 8.53 billion, 9.53 billion, and 10.64 billion yuan [3][4].