周大福：1H earnings missed, 2H still under pressure

Investment Rating - The report maintains a "BUY" rating for Chow Tai Fook with a target price (TP) cut by 31% to HK$10.00, reflecting lower net profit forecasts [1][3]. Core Insights - Chow Tai Fook reported a 1H FY25 revenue decline of 20.4$39.4 billion, with net profit dropping 44.4% YoY to HK$2.5 billion, which was 20$2 billion and declared a dividend of HK$0.2 per share, despite the significant decline in net profit [1][2]. Financial Performance Summary - Revenue for FY25E is projected at HK$91,057 million, reflecting a YoY decline of 16.2%. For FY26E and FY27E, revenue is expected to decrease by 2.4% and increase by 3.2%, respectively [2][5]. - Net profit estimates for FY25E, FY26E, and FY27E are HK$4,994 million, HK$6,396 million, and HK$6,829 million, indicating a YoY change of -23.2%, +28.1%, and +6.8%, respectively [2][5]. - The gross profit margin is expected to improve slightly to 25.1% in FY25E, while the EBIT margin is projected at 10.5% [5][7]. Shareholder Returns - Chow Tai Fook has increased its payout ratio from 55% in 1HFY24 to 79% in 1HFY25, reflecting its commitment to shareholder returns despite the decline in net profit [1][2].