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<Research> HSBC Research: Gold Price Pullback No Hindrance to CHOW TAI FOOK (01929.HK) Earnings Growth; TP Raised to HKD14.8
Recommend 10 Positive 9 Negative 9 |
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HSBC Global Investment Research issued a report stating that CHOW TAI FOOK (01929.HK)'s results for FY2026 ended March met expectations. The full-year dividend payout ratio was 73.4%, slightly below the broker’s forecast but still within management’s target range of 70% to 80%. The broker believes the recent pullback in gold prices will not hinder the company’s earnings growth. Instead, it may stimulate demand for priced gold jewelry while reducing gold hedging losses, offsetting the negative impact on gross margin. The broker maintained a Buy rating and raised the TP from HKD13.5 to HKD14.8. The report noted that the spot gold price has fallen 11% from the end of FY2026 to USD4,100 per ounce. Management estimates that if the gold price reaches USD4,300 per ounce by the end of FY2027, the company will record a small hedging gain, compared with hedging losses equivalent to 6.6% of revenue in FY2026. HSBC Global Investment Research expects these positive factors to largely offset the impact of operating margin declining from 20% to 14% in FY2027, while net profit margin is projected to expand by 100 bps to 10.5%, supporting a 19% YoY increase in dividends. (gc/da) 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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