Xiaomo: Raised the target price of Chow Tai Fook (01929) to HK$19 to be listed as the preferred stock in the Chinese jewelry industry

The Zhitong Finance App learned that J.P. Morgan Chase released a research report saying that due to weak consumer sentiment and fluctuations in gold prices, the resilience of Chow Tai Fook (01929) is more prominent than the overall industry and is listed as the bank's preferred stock for the Chinese jewelry industry. The target price was raised from HK$18.5 to HK$19, reaffirming the “increase” rating.

The bank said that Chow Tai Fook's retail sales fell by only 0.5% year on year, store productivity remained steady, and strong growth in Hong Kong, Macao and international business helped offset the weakness in the mainland market. The company indicated a 90% to 100% year-on-year increase in net profit for the first half of the fiscal year, but the basic gross margin and operating profit margin were still lower than originally anticipated.

The bank generally maintained Chow Tai Fook's earnings forecast for the 2027-2029 fiscal year. The profit for the second half of the 2027 fiscal year is expected to fall by a high number of units to a low double digit level over the same period last year.