Zhongjin: CHOW TAI FOOK (01929) brand transformation effect continues to show, performance in the first quarter of fiscal year 2027 exceeds expectations.

CICC released a research report stating that due to CHOW TAI FOOK's good sales performance, CHOW TAI FOOK's earnings per share forecast for the fiscal years 2027 and 2028 have been raised by 11% and 10% to 1.1 Hong Kong dollars each. Considering the fluctuation in industry valuations, the bank maintains its target price of 15.86 Hong Kong dollars, corresponding to a 2027 forecast price-earnings ratio of 15 times, and maintains an "outperform industry" rating. CHOW TAI FOOK In the fiscal year 2026, revenue increased by 5% year-on-year to 94.4 billion Hong Kong dollars, and net profit attributable to shareholders increased by 52% to 9 billion Hong Kong dollars, meeting market expectations. The company declared a final dividend of 0.45 Hong Kong dollars per share, with a full-year dividend payout ratio of 73%, corresponding to a dividend yield of about 7%, maintaining a high dividend payout ratio. In the second half of the fiscal year 2026, revenue increased by 10% year-on-year, with accelerated growth quarter-on-quarter. Among them, revenue from Mainland China increased by 5% to 43.8 billion Hong Kong dollars, with a net increase of 358 specialized CHOW TAI FOOK retail stores, with a year-end new store average monthly sales growth of 57% to about 1.6 million Hong Kong dollars. Revenue from Greater China and overseas markets increased by 33% to 11.6 billion Hong Kong dollars. The bank pointed out that CHOW TAI FOOK's direct and franchise same-store sales in Mainland China in May increased by 20% and 15% year-on-year, respectively, and by 41% in Hong Kong and Macau, exceeding market expectations. Management guidance for the fiscal year 2027 includes a mid-to-high single-digit revenue growth, an operating profit margin of approximately 14%, and an expected gold lending income of 500 million to 800 million Hong Kong dollars.