Citi Research: CHOW TAI FOOK Anticipates Fixed-price Gold Products to Account for 33-35% of Sales This Year
Chow Tai Fook's Performance: The company achieved same-store sales growth (SSSG) in Q3 FY26, aligning with broker expectations, while management anticipates low to mid-single-digit SSSG during the Lunar New Year period.
Gold Price Impact: Chow Tai Fook's gross margin target is considered conservative, based on a gold price of USD 4,500/oz, which is 7% lower than the current market price, potentially affecting sales of weight-based gold products.
Sales Strategy: Fixed-price gold products are expected to contribute 33-35% of the group's sales this year, with plans to increase this proportion to 35-40% over the next three years.
Broker Ratings: Citi maintains a Buy rating for Chow Tai Fook with a target price of HKD 18.2, while also adjusting earnings forecasts to exceed the company's guidance.
Get Free Real-Time Notifications for Any Stock
Analyst Views on 00590
About the author
Jewelry and Gold Mining Stocks Soar as Gold and Silver Prices Reach Record Highs; LAOPU GOLD Jumps 14% to Six-Month Peak
Gold and Silver Prices Surge: Gold futures in New York reached a historic high of USD5,080.1 per ounce, while silver futures peaked at USD107.925, reflecting significant increases in precious metal prices.
Jewelry Stocks Performance: Hong Kong-listed jewelry stocks, particularly LAOPU GOLD, experienced substantial gains, with expectations of strong sales during the Spring Festival due to high gold prices and promotional activities.
Gold Miners Thrive: Gold mining companies like ZIJIN MINING and ZHAOJIN MINING saw their stock prices rise significantly, benefiting from the increasing gold prices and high trading volumes.
Short Selling Activity: Various stocks in the jewelry and mining sectors showed notable short selling ratios, indicating a mix of investor sentiment and market speculation amidst the rising prices of gold and silver.
Jewelry and Gold Stocks Perform Well; LAOPU GOLD Rises Approximately 7%; LUK FOOK HOLD Reaches 7.5-Year High; CHOW TAI FOOK Remains Weak
Gold and Silver Prices Surge: Gold prices are nearing US$5,000 per ounce, with spot gold last quoted at US$4,944.08, while spot silver reached US$98.64 per ounce, reflecting significant increases in both metals.
Impact on Jewelry Stocks: The rise in gold prices has led to increased market expectations for gold product prices, positively affecting jewelry stocks in Hong Kong, particularly LAOPU GOLD, which saw a notable increase in its share price.
