CICC has released a research report, raising its earnings per share forecasts for CHOW TAI FOOK (01929) by 11% and 10% for the 2027 and 2028 fiscal years to HK$1.1 and HK$1.1 respectively, citing the company's robust sales performance.

Taking into account fluctuations in sector valuations, the firm has kept its target price unchanged at HK$15.86, which corresponds to a 15x forward price-to-earnings ratio for FY2027, and reaffirmed its "Outperform" rating on the stock.

For the 2026 fiscal year, Chow Tai Fook reported a 5% year-on-year increase in revenue to HK$94.4 billion, with attributable net profit surging 52% to HK$9.0 billion, results that aligned with market consensus.

The company declared a final dividend of HK$0.45 per share, bringing the full-year payout ratio to 73%, which implies a dividend yield of approximately 7%, maintaining a high level of shareholder returns.

Revenue in the second half of FY2026 accelerated, growing 10% year-on-year. Mainland China revenue increased 5% to HK$43.8 billion, with a net closure of 358 Chow Tai Fook specialty retail points. The average monthly sales for new stores opened during the year grew 57% to around HK$1.6 million.

Revenue from Hong Kong, Macau, and overseas markets rose 33% to HK$11.6 billion.

The report noted that Chow Tai Fook's self-operated and franchised same-store sales in Mainland China for April to May grew 20% and 15% year-on-year, respectively, while Hong Kong and Macau sales increased 41%, exceeding market expectations.

Management has provided guidance for FY2027, projecting mid-to-high single-digit year-on-year revenue growth, an operating profit margin of around 14%, and expected gold loan income in the range of HK$500 million to HK$800 million.