CHOW TAI FOOK(01929) 光大证券·2024-11-27 13:29Investment Rating - The report maintains a "Buy" rating for Chow Tai Fook (1929 HK) despite a downward revision in profit forecasts [4] Core Views - Chow Tai Fook's 1HFY2025 revenue decreased by 20 43% YoY to HKD 39 408 billion, with net profit attributable to shareholders dropping by 44 40% YoY to HKD 2 53 billion [1] - The company's gross margin improved significantly by 6 49 percentage points to 31 41%, driven by higher gold prices and an increased proportion of fixed-price gold products [2] - Retail sales value for the period from October 1 to November 18, 2024, declined by 15% YoY, with mainland China down 14 2% and Hong Kong, Macau, and other markets down 20% [1] Financial Performance - Operating expenses ratio increased by 2 87 percentage points to 15 95%, with selling/distribution, administrative, and financial expense ratios rising by 1 71, 1 04, and 0 11 percentage points respectively [2] - The company revised its FY2025/FY2026/FY2027 net profit forecasts downward by 34%/23%/20% to HKD 4 944 billion, HKD 6 26 billion, and HKD 7 014 billion respectively [4] Operational Highlights - Total number of stores decreased by 240 to 7,346 as of September 30, 2024, with mainland China stores down by 239 to 6,968 and Hong Kong/Macau/other markets remaining flat at 145 [3] - The company launched its first new concept experience store in Central, Hong Kong in September 2024 and plans to open its first mainland flagship store in Shanghai in 2025 [3] - The "Chow Tai Fook Official Mall" mini-program introduced AR technology for virtual jewelry try-ons starting April 2024 [3] Market Position - Chow Tai Fook maintains strong channel and brand competitiveness in the industry, with continuous optimization of its high-end product lines [4] - The company's retail value composition shows mainland China accounting for 86 1% of total retail value, with Hong Kong, Macau, and other markets making up 13 9% [13] Valuation Metrics - The report provides forward-looking P/E ratios of 14x, 11x, and 10x for FY2025E, FY2026E, and FY2027E respectively [5] - P/B ratios are projected at 2 6x, 2 5x, and 2 4x for the same periods [5]