Chow Tai Fook Jewellery: June-Q sales in line; on track towards FY27 guidance

Research evidence excerpt

Chow Tai Fook Jewellery: June-Q sales in line; on track towards FY27 guidance

Forecast returns

Forecast price appreciation 31.9%

Forecast dividend yield 6.4%

Forecast stock return 38.3%

Market return assumption 11.1%

Forecast excess return 27.3%

Company Description

Established in 1929 and listed on the Hong Kong Stock Exchange in 2011, Chow Tai Fook

Jewellery (CTF) is a leading jeweller in mainland China, Hong Kong and Macau. As of 31

March 2026, it had 5,689 points of sale (POS), 5,524 of which were in mainland China (5,305

Chow Tai Fook Jewellery POS and 219 POS under other brands, including CTF Watch, Hearts

on Fire, ENZO, SOINLOVE and MONOLOGUE) and 165 outside mainland China. Its principal

products are gold products, gem-set jewellery, platinum and karat gold products and

watches.

Valuation Method and Risk Statement

We base our price target on DCF.

We think key risks facing China's jewellery sector include: 1) a slowdown in China's economy,

which could dampen consumers' spending on jewellery; 2) lab-grown diamonds could gain

market share and intensify consumers' price sensitivity; 3) high volatility in gold prices may

waver consumers’ purchasing decision; and 4) competition from the Shuibei model, which

sells retail gold jewellery at wholesale prices.

CTF company-specific risks include: 1) competition from other jewellers as consumers may

not be able to differentiate their products; 2) relationship with franchisees that could impact

the operations of franchised stores; 3) the ability to increase gross margin by strengthening

fixed-price product offerings, given uncertainty about the recovery in consumer confidence;

and 4) potential closures of stores, notably franchised stores in low-tier cities, due to weak