CHOW TAI FOOK(01929) 华泰证券·2024-10-09 08:08Investment Rating - The report maintains an "Overweight" rating for Chow Tai Fook (1929 HK) with a target price of HKD 10.26 [2][7] Core Views - Chow Tai Fook continues to optimize its store structure and product mix, focusing on higher-margin "piece gold" products, but same-store sales may face pressure due to rapid gold price increases [2] - The company is expected to close 5-7% of its stores (400-535 stores) in FY25 due to gold price volatility and competitive pressures [3] - Core operating margins are expected to improve due to rising gold prices and a shift towards higher-margin products [4] - Recent policy support for consumption could benefit the company, with its stock price rising 9.5% from September 25 to October 8 [5] Financial Forecasts - Revenue for FY25-27 is revised downward to HKD 90.0 billion, HKD 94.6 billion, and HKD 99.5 billion, respectively, from previous estimates of HKD 103.6 billion, HKD 108.8 billion, and HKD 114.3 billion [2] - Net profit attributable to shareholders for FY25-27 is adjusted to HKD 5.69 billion, HKD 6.15 billion, and HKD 6.56 billion, respectively [2] - EBITDA for FY25-27 is forecasted at HKD 11.26 billion, HKD 11.97 billion, and HKD 12.79 billion, respectively [11] Valuation Metrics - The report values Chow Tai Fook at 18x FY25 PE, higher than the industry average of 13x, reflecting its leading position in the industry [2] - The company's ROE is expected to remain strong, ranging from 21.77% to 23.44% from FY25 to FY27 [6] Industry Context - Chow Tai Fook is positioned to benefit from industry consolidation and increased market share as competition intensifies [2] - The gold jewelry sector is less sensitive to short-term stimulus measures like consumption vouchers, but long-term policy support could drive recovery in high-end discretionary spending [5]