CITIC Lyon: Maintaining Chow Tai Fook's (01929) target price of HK$10.7 rating “hold”

The Zhitong Finance App learned that CITIC Lyon released a research report stating that it maintains Chow Tai Fook's (01929) target price of HK$10.7 and the “holding” rating.

The bank said that retail sales and same-store sales growth (SSSG) remained resilient in the first quarter of fiscal year 2027, but passenger traffic declined in July due to weather and World Cup events, and growth slowed. Retail sales in the Mainland China/Hong Kong and Macau markets increased 10.7%/44.8% year-on-year. Same-store sales growth also rebounded, with the Mainland China/Hong Kong and Macau markets increasing 19.6%/41.7% year over year. Mainland China closed 258 stores in the first quarter of fiscal year 2027, down from 311 in the first quarter of fiscal year 2026. Unlike last year, weighted gold products performed better than fixed-price products. Maintain the 2027 fiscal year sales guidelines (year-on-year increase in orders to a higher number of units) and net profit expectations unchanged.

If the price of gold remains around 4,100 US dollars per ounce, gross margin and operating profit margin may fluctuate as sales may shift more to weighted pricing products, but net profit may remain the same due to hedging earnings.