Chow Tai Fook Jewellery Group Ltd: Risk Reward Update

研报英文原文证据摘录

Chow Tai Fook Jewellery Group Ltd: Risk Reward Update

UpdateM

RiskRisk RewardReward– Chow -TaiChowFook JewelleryTai FookGroup LtdJewellery(1929.HK) Group Ltd (1929.HK)

Operation resilience via brand transformation, efficiency and capital allocation

PRICE TARGET HK$19.00 OVERWEIGHT THESIS

We use a P/E-based valuation, consistent with the rest of our consumer discretionary ▪We see quality growth via brand building

coverage. Our price target is based on 18x F27e P/E, slightly above the average since 2016. and operation efficiency enhancements.

This is to reflect a strategy change with slower network expansion but stronger same-store ▪Wide product offerings with both weight-

profitability. We await achievement of margin expansion beyond gold price hikes. We project based gold jewelry and fixed-price jewelry

a ~30% EPS CAGR over F25-27. products allow flexibility in sales strategy

based on consumer preference changes. HK$16.43

Flexible capital allocation and gold hedging

Consensus Price Target Distribution HK$11.20 HK$21.40 policy drive financial resilience in different MS PT

gold cycles.Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates

▪Successful launches of fixed-price jewelry

collections since F23 have shown its design

capability and craftsmanship. Its

RISK REWARD CHART contemporary product design is unique in

the market vs. pure heritage gold designs by

peers.

HKD ▪Store and product mix upgrades support

HK$24.00HK$24.00(+115.83%)HK$24.00(+115.83%)(+115.83%) structural margin expansion.

24 ▪Valuation looks attractive vs. the 17x

average NTM P/E since 2016.

HK$19.00HK$19.00(+70.86%)HK$19.00(+70.86%)(+70.86%)

Consensus Rating Distribution

75% Overweight

12 HK$11.12HK$11.12HK$11.12 25% Equal-weight

0% Underweight