CHOW TAI FOOK(01929) 天风证券·2024-12-09 05:53Investment Rating - The investment rating for Chow Tai Fook (01929) is "Buy" with a target price of 7.04 HKD, maintaining the rating for the next six months [1]. Core Views - The report highlights strong growth in fixed-price products, which have increased their share in the overall sales mix [1]. - The company reported a significant decline in revenue and net profit for FY25H1, with revenue at 39.41 billion HKD, down 20.4%, and net profit at 2.53 billion HKD, down 44.4% due to substantial fluctuations in international gold prices [1]. - Operating profit for FY25H1 was 6.78 billion HKD, reflecting a 4% increase, with an operating profit margin (OPM) of 17.2%, up 4 percentage points [1]. - The gross profit margin improved to 31.4%, an increase of 6.5 percentage points, benefiting from rising gold prices and a higher contribution from fixed-price gold products [1]. - The interim dividend declared was 0.20 HKD per share, with a payout ratio of 78.9%, the highest in the last five years [1]. Summary by Sections Financial Performance - FY25H1 revenue was 39.41 billion HKD, a decrease of 20.4%, while net profit was 2.53 billion HKD, down 44.4% due to losses from the revaluation of gold lending contracts [1]. - Operating profit was 6.78 billion HKD, up 4%, with an OPM of 17.2%, also up 4 percentage points [1]. - The gross profit margin increased to 31.4%, up 6.5 percentage points, driven by higher gold prices and increased sales of fixed-price gold products [1]. Regional Performance - Revenue from Mainland China, Hong Kong, Macau, and other markets was 33.02 billion HKD and 6.38 billion HKD, respectively, with year-on-year changes of -18.8% and -27.9% [1]. - Retail and wholesale sales in Mainland China were 13.84 billion HKD and 19.19 billion HKD, with year-on-year changes of -21.9% and +16.4% [1]. Product Performance - Revenue from jewelry, platinum, and K-gold products was 5.43 billion HKD, down 20% year-on-year [1]. - Revenue from gold products (valued) was 26.13 billion HKD, down 29.7%, while revenue from gold products (priced) was 4.65 billion HKD, up 117.9% [1]. - Overall revenue from gold products decreased by 21.6%, accounting for 79.4% of total revenue [1]. Strategic Initiatives - The company is focused on five strategic initiatives: brand transformation, product optimization, accelerating digitalization, improving operational efficiency, and enhancing talent development [1]. - Positive progress in brand transformation includes the launch of a new concept store in Central Hong Kong and significant retail value from the signature "Chuan Fu" series, exceeding 1.5 billion HKD since its launch [1]. - The company continues to optimize its product and pricing strategies, with strong sales of priced gold products contributing to a 100% year-on-year increase in retail value in Mainland China [1].