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<Research>Citi: CHOW TAI FOOK Expects Fixed-price Gold Products to Contribute 33-35% of Sales This Yr
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CHOW TAI FOOK (01929.HK) achieved SSSG in 3QFY26, in line with the broker's expectations, Citi said in a research report. Although Citi believed the company's upward revision of its results guidance exceled market expectations, it considered the gross margin target to be conservative, as it is based on a gold price of USD4,500/ oz, 7% lower than the current price. Chow Tai Fook's management anticipated that SSSG during the Lunar New Year period will reach low to mid-single digits, as some fixed-price products were sold in advance before the price increase in October. While the persistent rise in gold prices may affect sales of weight-based, fixed-price gold products will benefit and may drive overall sales during the Spring Festival. It was expected that fixed-price gold products will contribute 33-35% of the group's sales this year, with management aiming to raise the sales proportion to 35-40% within three years. The broker fine tuned its earnings forecast for Chow Tai Fook for 2026 to exceed the company's results guidance, maintaining a Buy rating with a target price of HKD18.2. In the Chinese gold jewelry industry, the preference order of Citi was LAOPU GOLD (06181.HK) with a target price of HKD1,119, LUK FOOK HOLD (00590.HK) with a target price of HKD35.2, and Chow Tai Fook. AASTOCKS Financial News Website: www.aastocks.com |
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