CICC Lowers CHOW TAI FOOK (01929.HK) Target Price to $16.89, Citing Price Adjustments Boosting Profitability

The analyst rating from Citi on CHOW TAI FOOK (01929.HK) is based on the anticipation of strong operating results for the third quarter of FY26, expected to be announced in January. The firm expects the company to raise its same-store sales growth guidance due to robust performance in October and November, along with a favorable outlook for December driven by rising fixed-price gold product prices. Consequently, Citi has maintained a Buy rating and increased its target price from HKD17 to HKD18.2, reflecting an improved earnings forecast.

The analyst rating for CHOW TAI FOOK (01929.HK) is initiated as a "Buy" by Northeast Securities due to the company's steady recovery in its 1H26 results, which showed a largely flat revenue of $38.986 billion compared to the same period last year. The improvement in the expense ratio led to a year-over-year growth in operating profit of 0.7%, reaching a nearly five-year high operating profit margin of 17.5%. Additionally, the forecasted net profit attributable to the parent company for 2026-2028 shows a positive trend, with corresponding price-to-earnings (PE) ratios indicating potential for growth.

The analyst rating for CHOW TAI FOOK was maintained at "Outperform" by CICC due to several factors. The report highlighted that the company adjusted the prices of its fixed-price gold products, with increases between 4% and 16%, which is seen as a positive move against the backdrop of rising gold prices. This adjustment is expected to enhance CHOW TAI FOOK's premium brand image and ensure better product profitability amid smooth cost fluctuations. Additionally, CICC expressed optimism about the company's brand strength enhancement and channel optimization, despite lowering its target price by 13% to $16.89 due to industry valuation fluctuations.