Tianfeng Securities released a research report, said that to maintain Chow Tai Fook Jewellery (01929) "buy" rating, as the industry leader, will maintain high-quality expansion, focus on brand building and product design. The impact of the FY2024 epidemic has weakened, and the total business volume of FY24-26 is expected to be HK $1,150,1562 / HK $217 billion and the net profit of FY24-26 is HK $84Universe 105 / HK $15.2 billion. The company's FY24Q1 retail value increased by 29.4% year-on-year, and same-store sales growth of FY24Q1 in mainland China, Hong Kong and Macau showed an upward trend, thanks to the continued recovery of personnel mobility and retail activity. Same-store sales in mainland China have grown steadily since the past two quarters, and the trend continues to improve.
As of June 30, 2023, the company had a total of 7740 retail outlets, a net increase of 85, including 7594 in mainland China, a net increase of 84, and a net increase of 1 in Hong Kong, Macao and other markets, the report said. 76.7% of Chow Tai Fook Jewellery jewelry retail outlets are in the form of franchise stores, and the retail value of Chow Tai Fook Jewellery jewelry franchise stores increased by 34.8% at Q1, mainly supported by the stable pace of opening stores and the increase in store efficiency. In terms of online channels, FY24Q1 e-commerce contributes 4.6% to the retail value of mainland China, and sales account for 11%.
The bank mentioned that Chow Tai Fook Jewellery adopted a differentiated brand strategy, with Chow Tai Fook Jewellery's flagship brand as the core, and targeted layout of high-end diamond market, color jewelry market, light luxury jewelry market and music culture market with HEARTSONFIRE, ENZO, SOINLOVE and MONOLOGUE respectively. Brand matrix covers the whole line from high-end to Volkswagen, serving customers' jewelry needs at different stages of life, and covering market demand in different dimensions. In addition, FY2023 has formulated and adopted five major strategic guidelines, including accurate brand positioning, product optimization, operational efficiency optimization, comprehensive strengthening of talent training and acceleration of digital transformation and upgrading, the company will continue to adopt a sustainable mode of operation and strike a balance between implementing strict cost management and optimizing product and business practices.