BOCOM International·2026-03-04 02:46Investment Rating - The report maintains a "Buy" rating for Chow Tai Fook Enterprises (659 HK) with a target price raised to HKD 10.60, indicating a potential upside of 20.5% from the current price of HKD 8.80 [3][8]. Core Insights - The company's diversified business model demonstrates resilience and financial stability, contributing to growth. The financial services segment has emerged as a key growth driver, with a significant increase in operating profit and new business value [5][6]. - Chow Tai Fook's half-year results for 2026 show a 15% year-on-year increase in attributable profit to HKD 1.334 billion, supported by a 5.9% rise in total revenue to HKD 12.827 billion, driven by strong performance in the insurance business [5][6]. - The company continues to optimize its business portfolio, focusing on potential growth areas while maintaining a cautious outlook on logistics and construction segments [5][6]. Financial Overview - Revenue projections for the fiscal years ending June 30 are as follows: HKD 26,422 million in 2024, HKD 24,285 million in 2025, HKD 25,280 million in 2026E, HKD 26,559 million in 2027E, and HKD 28,018 million in 2028E, with a forecasted growth rate of 4.1% in 2026 [2][10]. - Core profit estimates are projected at HKD 2,818 million for 2024, HKD 2,162 million for 2025, and HKD 2,442 million for 2026E, reflecting a gradual recovery [2][10]. - The company reported a net debt ratio improvement to 34% as of June 30, 2025, down from 37% the previous year, indicating enhanced liquidity and financial health [5][6]. Business Segment Performance - The financial services segment saw a robust operating profit increase of 19% year-on-year to HKD 729 million, with annualized premium income rising by 48% and new business value up by 39% [5][6]. - The logistics and construction segments faced challenges, with profits declining by 14% and 21% respectively, while the strategic investment segment reported a significant profit increase of 78% [5][6]. - The company declared an interim dividend of HKD 0.28 per share, a 3% increase year-on-year, reflecting its commitment to providing consistent returns to shareholders [5][6].