[ET Net News Agency, 22 November 2017] Deutsche Bank lifted its target price for Chow
Tai Fook Jewellery Group (CTF)(01929) to HK$10.4 from HK$8.3, and upgraded its rating to
"buy" from "hold".
The research house said CTF's management is more bullish, raising its store opening plan
for China from 80-100 net store openings for FY2018 to 140-150 (it might open more stores
in lower tier cities in the future with recovery in tier one/two cities potentially
spreading to lower tier cities.
Meanwhile, its Guidance for SSS from MSD to HSD growth for FY2018, suggesting a more
bullish outlook. It raised its ordinary payout guidance to at least 67% from 1H FY2017's
26.4%.
DB believes the increase in guidance suggests the potential market recovery is spreading
over to lower tier cities from tier one/two cities currently. It believes the recovery can
continue in FY2019.
DB raised its net profit forecast by 3/5/8% for FY2018-20, mainly due to an increase
in SSS and operating profit leverage. (KL)