BOCOM International·2026-03-04 03:24Investment 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 total revenue for the first half of the fiscal year 2026 increased by 5.9% year-on-year to HKD 12.83 billion, supported by strong growth in the insurance business [5][6]. - The company declared an interim dividend of HKD 0.28 per share, reflecting a year-on-year increase of approximately 3%, showcasing its commitment to providing sustainable returns to shareholders [5][6]. Financial Overview - Revenue projections for the fiscal years ending June 30 are as follows: HKD 26.42 billion in 2024, HKD 24.29 billion in 2025, HKD 25.28 billion in 2026E, HKD 26.56 billion in 2027E, and HKD 28.02 billion in 2028E, with a forecasted growth of 4.1% in 2026 [2][10]. - Core profit is expected to be HKD 2.44 billion in 2026, with an EPS forecast of HKD 0.82 [2][10]. - The company has a strong liquidity position, with cash and bank deposits amounting to HKD 20.9 billion, significantly exceeding its short-term debt [5][6]. Business Segment Performance - The financial services segment reported a robust operating profit growth of 19% year-on-year, driven by a 48% increase in total annualized premiums and a 39% rise in new business value [5][6]. - The logistics and construction segments faced challenges, with profits declining by 14% and 21% respectively, while the strategic investment segment saw a notable profit increase of 78% [5][6]. - The company is focused on optimizing its business portfolio, emphasizing financial services as a core pillar and expanding its logistics operations through recent acquisitions [5][6].