周大福：H1经营承压，3QTD降幅环比收窄

Investment Rating - The investment rating for the company is "Buy" with a target price of HKD 8.50 [8][9]. Core Views - The company reported a significant decline in revenue for H1 FY25, with a total of HKD 39.41 billion, representing a year-on-year decrease of 20.4%. However, operating profit increased by 4.0% to HKD 6.78 billion, leading to an operating margin improvement of 4 percentage points to 17.2%. Net profit fell by 44.4% to HKD 2.53 billion, primarily due to substantial losses from gold lending amounting to HKD 3.065 billion caused by gold price volatility [1][2]. - The company announced an interim dividend of HKD 0.2 per share and plans to repurchase up to HKD 2 billion worth of shares, reflecting confidence in long-term growth [1]. - The sales performance was impacted by high gold price fluctuations, but the introduction of fixed-price products helped improve gross margins, which rose by 6.5 percentage points to 31.4% [2]. - The company has optimized its store network, closing 239 stores in H1 FY25, resulting in a total of 7,113 stores across various regions. The company expects to slow down store closures in the second half of the fiscal year [4]. Summary by Sections Financial Performance - For H1 FY25, the company reported revenue of HKD 39.41 billion, a decrease of 20.4% year-on-year. Operating profit was HKD 6.78 billion, up 4.0%, with a net profit of HKD 2.53 billion, down 44.4% [1]. - The company maintains a forecast for net profit for FY25 to FY27 at HKD 5.69 billion, HKD 6.15 billion, and HKD 6.56 billion, respectively, with corresponding EPS of HKD 0.57, HKD 0.61, and HKD 0.66 [5]. Sales and Market Trends - Same-store sales growth (SSSG) for H1 FY25 showed declines of 25.4% in mainland China and 30.8% in Hong Kong and Macau. The introduction of the "Chuanfu" series in April generated over HKD 1.5 billion in retail value, significantly boosting fixed-price product sales by 117.9% [2][3]. - The sales decline has narrowed in the third quarter to a 15% year-on-year drop, compared to a 21% decline in the previous months, attributed to promotional events and new product launches [3]. Store Network and Strategy - The company is actively optimizing its store network to enhance financial health and achieve high-quality profitability, with a focus on improving store performance amid macroeconomic challenges [4]. - The total number of stores as of the end of H1 FY25 was 6,968 in mainland China and 145 in Hong Kong and Macau [4]. Valuation and Market Position - The company is valued at a PE ratio of 15 times for FY25, reflecting its position as a market leader expected to benefit from increased industry concentration due to heightened competition [5].