CHOW TAI FOOK Aims to Increase Retail Prices of Gold Items by 12-18% by the End of October

The analyst rating from Jefferies for CHOW TAI FOOK was maintained at "Buy" despite lowering its target price from $18.5 to $17. This decision was influenced by a more conservative outlook on sales growth and profit margins for FY2027 and FY2028, leading to a reduction in net profit forecasts by 8%, 11%, and 11% for FY2026-2028, as well as sales forecasts by 5%, 5%, and 6% for the same period. The rating reflects the broker's view of potential upside despite the adjustments made to their financial projections.

The analyst rating for CHOW TAI FOOK was influenced by several key factors highlighted in the article. Firstly, the company's 1HFY26 results were in line with expectations, indicating stable performance. Despite a significant 17.5% decline in store numbers, CHOW TAI FOOK managed to reduce its revenue decline from 17.5% in FY25 to just 1.1%, thanks to positive same-store sales growth. Specifically, same-store sales in Mainland China, Hong Kong, and Macau showed growth of 2.6% and 4.4% respectively in the first half of the fiscal year. Additionally, the management's conservative guidance for low single-digit revenue growth for FY26 was exceeded by the company's year-to-date performance, suggesting stronger-than-expected operational resilience. As a result, HSBC Global Research raised the target price for CHOW TAI FOOK from HKD17.9 to HKD19.2 while maintaining a "Buy" rating, reflecting confidence in the company's ability to navigate challenges and achieve growth.

The analyst rating for CHOW TAI FOOK was influenced by several factors outlined in the CLSA research report. Although the company's sales and profit for the first half of FY2026 were slightly below market consensus, the guidance for same-store sales growth remained unchanged, and there was an increase in profitability guidance. CLSA forecasted a 3% growth in sales and a 40% growth in net profit for FY2026, with expected gross and operating profit margins of 30.6% and 18%, respectively. Additionally, the firm raised its 12-month target price from $12 to $13, maintaining a forward PE ratio of 12x, and emphasized that the upcoming peak season sales performance would be critical for the share price.

The analyst rating for CHOW TAI FOOK (01929.HK) is maintained as "Buy" by Daiwa due to several positive factors outweighing the negatives in the company's recent 1HFY2026 results. Despite revenue and net profit being slightly below market consensus, the increase in dividend yield and dividend per share (DPS), along with a raised guidance for 2HFY2026, contributed to a more favorable outlook. Additionally, Daiwa revised its profit margin forecasts upward, leading to an increase in EPS forecasts for 2026-2028 by 2-5%, and raised the 12-month target price from $15.5 to $18 while keeping the projected PE ratio unchanged at 18x.