CHOW TAI FOOK(01929) 光大证券·2024-06-13 22:30Investment Rating - The report maintains a "Buy" rating for Chow Tai Fook (1929 HK) despite a downward revision in profit forecasts due to declining gross margins and slower store expansion [4] Core Views - Chow Tai Fook's FY2024 revenue grew 14 82% YoY to HKD 108 713 billion while net profit attributable to shareholders increased 20 71% to HKD 6 499 billion [2] - The company's gross margin declined by 2 08 percentage points to 20 50% in FY2024 with a more significant drop of 4 29 percentage points in 2HFY2024 [2] - Retail value decreased by 20 2% YoY for the period from April 1 to May 31 2024 with mainland China down 18 8% and Hong Kong Macau other markets down 29% [2] Financial Performance - FY2024 operating expenses ratio decreased by 1 57 percentage points to 12 88% with sales management financial expense ratios at 8 75% 3 48% 0 65% respectively [2] - The company added 136 net new stores in FY2024 bringing the total to 7 782 stores with mainland China accounting for 7 403 stores [3] - Profit forecasts for FY2025 FY2026 were revised down by 7% 8% to HKD 7 439 billion HKD 8 182 billion respectively with a new FY2027 forecast of HKD 8 797 billion [4] Valuation Metrics - The company's PE ratio is projected to decline from 15 in FY2024 to 11 in FY2027 while PB ratio is expected to decrease from 3 7 to 3 2 over the same period [5] - ROE (attributable to parent company diluted) is forecasted to increase from 25 27% in FY2024 to 29 43% in FY2027 [5] Market Data - Chow Tai Fook's total market capitalization stands at HKD 94 484 billion with a 52 week price range of HKD 9 27 to HKD 12 98 [6] - The stock has shown negative performance relative to the Hang Seng Index with -32 24% over 3 months and -28 08% over 1 year [7]