消费有待恢复，刚需成交为主Tianfeng Securities released research reports stating that it maintains a "buy" rating on Chow Tai Fook (01929) as the strong performance of gold prices affects gold trinket consumption, while the optimization of gross margin with the increase of fixed-price sales ratio, adjusting the company's profit forecast. It is expected that the revenue for FY25-27 will be 94.5 billion Hong Kong dollars, 103.9 billion Hong Kong dollars, and 114.5 billion Hong Kong dollars respectively (previously 113.6 billion Hong Kong dollars, 121.4 billion Hong Kong dollars, 130.3 billion Hong Kong dollars), and the net profit attributable to shareholders will be 5.98 billion Hong Kong dollars, 6.91 billion Hong Kong dollars, 7.94 billion Hong Kong dollars (previously 6.9 billion Hong Kong dollars, 7.6 billion Hong Kong dollars, 8.5 billion Hong Kong dollars); EPS will be 0.60 Hong Kong dollars, 0.69 Hong Kong dollars, 0.80 Hong Kong dollars.
The strong performance of gold prices continues to partially impact gold trinket consumption.
SGE gold 9999 has risen by about 7% since July 2024 and is still showing strong performance in an upward trend; meanwhile, in August 2024, the total retail sales of consumer goods increased by 2.1%, among which, the sales of gold and silver jewelry decreased by 12.0%. Tianfeng Securities believes that the main reason is the rapid rise in gold prices partially restraining consumer spending, intensifying wait-and-see sentiment.
Consumer demand is awaiting recovery, with essential needs driving transactions.
According to the 'China Gold and Jewelry' official account, relevant surveys show that although most jewelry brands offer consumers a certain discount based on the listed price of gold trinkets, the discount level is limited against the backdrop of high gold prices. Consumer caution is high, and transactions for essential needs such as weddings dominate.
Chow Tai Fook's sales performance in FY25Q1 is weak.
Tianfeng Securities pointed out that due to the continuous impact of the macro environment on consumption, the same-store sales of the company in mainland China, Hong Kong, and Macau have all declined. Coupled with the high gold prices hovering, the demand for gold jewelry in the quarter (3 months ending June 30, 2024) has been affected, which is a phenomenon in the overall industry. In the quarter, same-store sales at direct-operated and franchised stores in mainland China decreased by 26.4% and 19.1% respectively year-on-year, while same-store sales in Hong Kong and Macau decreased by 30.8%; same-store sales in Hong Kong decreased by 27.4%, while same-store sales in Macau decreased by 41.3%.
Risk warning: Continuous rise in gold prices, loss of key executives, etc.
