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<Research> UBS Cuts CHOW TAI FOOK (01929.HK) TP to HKD16; FY Profit In Line but Dividend Misses
Recommend 5 Positive 8 Negative 5 |
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UBS published a research report stating that CHOW TAI FOOK (01929.HK) reported revenue and net profit of HKD94.4 billion and HKD9 billion respectively for FY2026, representing YoY growth of 5% and 52%. The results were in line with the broker’s expectations and consistent with the previously announced positive profit alert of 45% to 55% growth. During the period, the company’s payout ratio was 73%, below market expectations but within management’s target range of 70% to 80%. UBS noted that retail sales grew 14.7% YoY in April to May this year. Same-store sales increased by 19.7% for mainland China self-operated stores, 15.2% for mainland franchise stores, and 40.6% for Hong Kong and Macau stores, showing significant improvement from the March quarter. Management guided for overall revenue to record mid- to high-single-digit YoY growth in FY2027, with high-single-digit same-store sales growth in mainland China and low-double-digit growth in Hong Kong and Macau. In light of the recent strong same-store sales performance and better-than-expected official guidance, UBS raised its FY2027-FY2029 EPS forecasts for CHOW TAI FOOK by 1% to 5%. UBS said that, considering the higher beta, it increased the weighted average cost of capital in its discounted cash flow model from 9.3% to 10%, and lowered the TP for CHOW TAI FOOK from HKD18.5 to HKD16.0. The new TP corresponds to 15x FY2027 forecast PE and a dividend yield of 7%. The broker maintained its Buy rating on CHOW TAI FOOK. (ad/u) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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