Guotai Junan Securities·2024-06-16 10:31Investment Rating - The report maintains a rating of "Buy" for Chow Tai Fook (1929) [1][3]. Core Views - The FY2024 revenue performance met expectations, while profit was weaker than anticipated due to unrealized losses from gold loans. However, with rising gold prices and adjustments in product pricing strategies, profit margins are expected to improve in FY2025 [2][3]. Summary by Sections Financial Performance - For FY2024, Chow Tai Fook achieved revenue of HKD 108.71 billion, a year-on-year increase of 14.8%. The main operating profit was HKD 12.16 billion, up 28.9%, and the net profit attributable to shareholders was HKD 6.50 billion, reflecting a 20.7% increase [3][7]. - The adjusted gross profit margin was 22.8%, down 0.9 percentage points, while the main operating profit margin improved by 1.2 percentage points to 11.2% due to optimized pricing strategies and rising gold prices [3]. Future Projections - The projected net profit for FY2025-2027 is HKD 69.50 billion, HKD 79.63 billion, and HKD 89.94 billion, respectively, with corresponding EPS of HKD 0.70, HKD 0.80, and HKD 0.90. A target price of HKD 10.50 is set based on a 15x PE for FY2025 [3]. Market Dynamics - In FY2024, revenue from mainland China was HKD 89.70 billion, a 9.9% increase, while revenue from Hong Kong, Macau, and other markets surged by 45.6% to HKD 19.02 billion. The company added 153 jewelry stores, bringing the total to 7,548 retail points as of March 31, 2024 [3][4].