Gold Ten Data, January 7th news, Goldman Sachs released a research report stating that it maintains a 'Neutral' rating on Chow Tai Fook (01929.HK) with a target price of 8 Hong Kong dollars. The company's guidance for the 2025 fiscal year and the second half of the fiscal year remains unchanged. The same-store sales growth (SSSG) in December this quarter is generally the same as the guidance, with double-digit declines in mainland China and high double-digit to low 20% declines in Hong Kong and Macau. The report quotes management as saying that there is sufficient cash flow to support dividend payments, with a free cash flow of HKD 10 billion in the second half of the 2025 fiscal year, which is enough to support capital expenditures and a dividend payout ratio of 70-80%. Management also has a cautious attitude towards the company's performance during the Lunar New Year, and underperforming stores will continue to close in 2026. If sentiment remains weak, management believes that 6,000-6,500 stores can continue. The company also has brand upgrades and has added concept stores in mainland China. The company also plans to open 20-30 new Chow Tai Fook Heritage Series stores in mainland China.
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Goldman Sachs: Chow Tai Fook 'neutral' rating maintained, target price of 8 Hong Kong dollars
Gold Ten Data, January 7th news, Goldman Sachs released a research report stating that it maintains a 'Neutral' rating on Chow Tai Fook (01929.HK) with a target price of 8 Hong Kong dollars. The company's guidance for the 2025 fiscal year and the second half of the fiscal year remains unchanged. The same-store sales growth (SSSG) in December this quarter is generally the same as the guidance, with double-digit declines in mainland China and high double-digit to low 20% declines in Hong Kong and Macau. The report quotes management as saying that there is sufficient cash flow to support dividend payments, with a free cash flow of HKD 10 billion in the second half of the 2025 fiscal year, which is enough to support capital expenditures and a dividend payout ratio of 70-80%. Management also has a cautious attitude towards the company's performance during the Lunar New Year, and underperforming stores will continue to close in 2026. If sentiment remains weak, management believes that 6,000-6,500 stores can continue. The company also has brand upgrades and has added concept stores in mainland China. The company also plans to open 20-30 new Chow Tai Fook Heritage Series stores in mainland China.