Furui: CHOW TAI FOOK (01929) "Buy" rating, target price of 17.2 Hong Kong dollars

Furui released a research report stating that CHOW TAI FOOK (01929) released a profit announcement, expecting a year-on-year increase of 45% to 55% in net profit by the end of March 2026, in line with the bank's forecast of a 50.8% growth. The bank expects CHOW TAI FOOK's full-year net profit to reach 8.9 billion yuan, with sales increasing by 4.2% to 93 billion yuan. The company's growth is attributed to gross margin improvement and operating leverage, with gross margin benefiting from gold prices, favorable sales mix shifts towards retail business and premium pricing products. The bank has given CHOW TAI FOOK a "buy" rating with a target price of 17.2 Hong Kong dollars. The bank recently conducted an on-site visit to CHOW TAI FOOK's global flagship store on Guangdong Road in Tsim Sha Tsui. The store, which opened for a trial run in February 2026, features all iconic series including Rouge, Dawn, Joie, as well as a new category of gold household items and collaborations with IPs such as Disney and Chikawa. The store also includes high-end jewelry, HEARTS ON FIRE series, a wedding celebration area designed for couples, and a private VIP area. According to channel checks, CHOW TAI FOOK's same-store sales trend in mainland China for the first quarter of the 2027 fiscal year remains positive, with better performance in weighted gold products; Hong Kong and Macau continue to benefit from the strengthening of the renminbi.