CHOW TAI FOOK(01929) 信达证券·2024-11-28 08:23Investment Rating - The investment rating for Chow Tai Fook (1929.HK) is not explicitly stated in the provided documents, but the report indicates a significant decline in revenue and a mixed outlook for future performance [1]. Core Insights - Chow Tai Fook reported a revenue of HKD 39.408 billion for FY2025H1, a decrease of 20.4% year-on-year, while gross profit increased by 0.5% to HKD 12.378 billion, leading to an operating profit of HKD 6.776 billion, which represents a 4% increase [1]. - The gross margin improved to 31.4%, up 6.5 percentage points year-on-year, indicating enhanced profitability despite revenue challenges [1]. - The company plans to distribute an interim dividend of HKD 0.2 per share, with a payout ratio of 78.9% [1]. Summary by Sections Financial Performance - For FY2025H1, revenue from mainland China was HKD 33.031 billion, down 18.8%, with retail and wholesale revenues declining by 21.9% and 16.4% respectively [1]. - The number of Chow Tai Fook stores in mainland China was 6,968, with a net closure of 239 stores [1]. - Same-store sales in mainland China for gold and jewelry decreased by 26.4% and 29.8% respectively, with overall same-store sales down 25.4% [1]. Profitability - The gross margin in mainland China was 31.2%, an increase of 6.2 percentage points, driven by rising gold prices and product mix optimization [1]. - Operating profit margin improved to 13.8%, up 2.3 percentage points year-on-year, despite a decline in revenue [1]. Market Trends - Revenue from Hong Kong, Macau, and other markets was HKD 6.377 billion, down 27.9%, with same-store sales declining by 30.8% [1]. - The gross margin in these markets was 32.7%, an increase of 8.5 percentage points, attributed to higher margins on retail gold products [1]. Future Outlook - The company expects a slowdown in store closures and a narrowing of same-store sales declines in FY2025H2 [2]. - Revenue projections for FY2025 to FY2027 are HKD 89.5 billion, HKD 91.45 billion, and HKD 93.82 billion, reflecting a year-on-year decline of 18% in FY2025, followed by modest growth [3].