© Reuters CITIC Securities: Maintain Chow Tai Fook’s “buy” rating (01929) with a multi-pronged approach to improve corporate resilience
Zhitong Finance APP was informed that CITIC Securities released a research report stating that it maintains the “buy” rating of Chow Tai Fook (HK:) (01929), considering that the future epidemic will have a greater impact on the performance of stores of the mainland, and lowered the operating profit forecast for the fiscal year 2023-25 to 1042.5/1186.5/133 billion Hong Kong dollars, the net profit attributable to the parent company is expected to fall to 66.3 /8.11/9.42 billion Hong Kong dollars and the target price is 18 Hong Kong dollars. According to the FY2023 interim report performance meeting, the company will maintain its annual net store opening target of 1200-1300.
According to the report, the company established a strategy and reform committee this year and formulated five major strategic guidelines:1、Accurately create brand positioning to attract a wider range of young customers;2,Mix of products and series types;3、Optimize operational efficiency, reduce inventory levels and turnover days;4、People-oriented, strengthen personnel training comprehensively;5、Accelerate digital transformation and make good use of electronic technology and data analytics to support business development.about the product,Efforts will be made to reduce SKUs and develop products with higher gross profit margins. For example, the four beauties of life series that have been launched sold more than 10,000 pieces within three months of launch, with an average selling price of over HK$16,000.at the showroom,We will step up efforts to expand directly operated stores According to the FY2023 mid-term budget performance meeting, given that the 7,000 store target in phase one is nearing completion (actual/target: 6,547 stores /7,000 stores), the company has decided to shift its focus to further improving the performance of individual stores. The FY2024 annual store opening target is 600-800, half of which will be directly operated stores. The bank believes that the above measures will lead to a stable performance on the earnings side.
