Investment 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 and growth outlook discussed in the report [1]. Core Insights - Chow Tai Fook has shown a recovery in same-store sales, with a notable increase in retail value and a positive consumer response despite high gold prices [2]. - The company has optimized its product structure, with a significant increase in the sales of priced jewelry, which has enhanced brand strength [3]. - Continuous optimization of channels and the introduction of new store formats are accelerating the brand transformation [4]. Financial Performance Summary - For FY2026 H1, Chow Tai Fook reported revenue of HKD 38.986 billion, a slight decrease of 1.1% year-on-year, and a net profit of HKD 2.534 billion, reflecting a modest increase of 0.2% [1]. - The company declared an interim dividend of HKD 0.22 per share, with a payout ratio of 85.7% [1]. - The revenue breakdown shows that the mainland China market accounted for 82.6% of total sales, with a year-on-year decline of 2.5%, while sales outside mainland China increased by 6.5% [2]. Product and Market Dynamics - The sales of priced jewelry in mainland China increased by 16.1%, while the sales of gold jewelry decreased by 5.8% [3]. - The launch of the high-end jewelry series "He Mei Dong Fang" has demonstrated strong demand, with nearly 200 pieces sold during the promotional event [3]. - The company has also introduced new jadeite designs and collaborated with notable brands to enhance its product offerings [3]. Operational Efficiency - Chow Tai Fook has optimized its store network, closing a net of 611 stores in FY2026 H1, resulting in a total of 5,663 stores [4]. - The gross profit margin for FY2026 H1 was 30.5%, a decrease of 0.9 percentage points year-on-year, attributed to lower margins in retail due to gold price fluctuations [5]. - The company has successfully reduced its inventory turnover days to approximately 424 days, a decrease of about 33 days year-on-year, indicating improved operational efficiency [5]. Profit Forecast - The projected net profits for Chow Tai Fook for FY2026 to FY2028 are HKD 7.980 billion, HKD 9.110 billion, and HKD 10.296 billion, respectively, with corresponding P/E ratios of 17.7X, 15.5X, and 13.7X [5][6].

Core Viewpoint - Guangdong Chao Hong Ji Industrial Co., Ltd. (referred to as "Chao Hong Ji") has submitted an application for an IPO on the Hong Kong Stock Exchange, aiming for a dual listing in both A-share and H-share markets, with CITIC Securities as the sole sponsor [1] Company Overview - Chao Hong Ji was established in 1997 in Shantou, Guangdong, focusing on the younger consumer demographic with a differentiated product offering of 18K gold jewelry, earning the title "King of K-gold" [2] - The company successfully listed on the Shenzhen Stock Exchange in 2010, becoming the first fashion jewelry company to do so in China [3] Business Expansion - In 2014, Chao Hong Ji fully acquired the well-known women's bag brand "FION," expanding its business from jewelry to handbags [4] - The company has shifted its focus towards trendy, lightweight, and high-craftsmanship gold jewelry, launching a series of products in collaboration with domestic cultural trends [5] Financial Performance - For the first half of 2025, Chao Hong Ji reported a revenue of 4.102 billion RMB, a year-on-year increase of 19.54%, and a net profit attributable to shareholders of 331 million RMB, up 44.34% [5] - Jewelry remains the primary revenue source, contributing 93.6% of total income in the first half of 2025, while handbag revenue has been declining, dropping 16.9% year-on-year to 120 million RMB [7][5] Revenue Growth and Trends - The classic gold jewelry segment has seen rapid growth, with revenue increasing from 1.42 billion RMB in 2022 to 2.92 billion RMB in 2024, reflecting a compound annual growth rate (CAGR) of 43.4% [8] - In contrast, the fashion jewelry segment has experienced slower growth, with revenue rising from 2.45 billion RMB in 2022 to 2.94 billion RMB in 2024, showing a CAGR of 9.5% [9] Margin Analysis - The overall gross margin for Chao Hong Ji's jewelry has declined from 24.6% in 2022 to 19.6% in the first half of 2025 [10] - Specifically, the gross margin for fashion jewelry decreased from 34.5% to 26.8%, while the classic gold jewelry margin improved from 7.9% to 11.8% [11] Store Expansion Strategy - As of June 30, Chao Hong Ji operated a total of 1,542 jewelry stores, including 201 self-operated and 1,337 franchise stores [12] - The company has transitioned from a self-operated model to a franchise model, with the number of self-operated stores decreasing from 324 to 202 between 2022 and 2025 [13] Same-Store Sales Growth - In the first half of 2025, same-store gross merchandise volume (GMV) for self-operated stores grew by 26.5%, while franchise stores saw a 32.0% increase [14] International Expansion - Chao Hong Ji has begun international expansion, opening its first overseas store in Malaysia in 2024, followed by another in Thailand, and two more in Cambodia in 2025 [16] - The funds raised from the IPO will primarily be allocated for overseas expansion, building new production facilities, and marketing efforts to support both domestic and international growth [16]