Lyon: CHOW TAI FOOK (01929) transformation helps consolidate industry position, rated as "hold"

Lyon released a research report stating that CHOW TAI FOOK (01929) has undergone a comprehensive brand transformation since 2024, including overseas expansion; by upgrading the retail experience with craftsmanship, prime locations, and VIP rooms, it helps to consolidate its leading position in gold jewelry; it has also launched a more diverse range of priced jewelry series in high-end and entry-level categories. Lyon rates CHOW TAI FOOK as "hold" with a target price of 11.2 Hong Kong dollars, based on a forecasted price-earnings ratio of 10 times over 12 months. The bank attended the opening of CHOW TAI FOOK's flagship store at Siam Paragon in Bangkok last week, the only gold jewelry store in the top luxury retail mall. Yesterday, they also visited its flagship store in Tsim Sha Tsui, which opened in February this year. The bank predicts that the group's revenue will increase by 5% year-on-year in the fiscal year 2026, with same-store sales growth of 6% in mainland China and 17% in Hong Kong and Macau. Gross margin and operating profit margin are 31.7% and 19.9% respectively, an increase of 2.2 and 3.4 percentage points year-on-year. Net profit is expected to increase by 50% year-on-year, with a net profit margin of 9.5%, an increase of 2.9 percentage points year-on-year.