[ET Net News Agency, 6 December 2018] Daiwa Research lowered its target price for Chow
Tai Fook Jewellery (CTF)(01929) to HK$7.5 from HK$12.3 and maintained its "buy" rating.
The research house said hosted CTF's post-results NDR in Singapore on 4-5 December.
Management indicated October SSSG in HK & Macau was at high-single-digit levels before
turning negative in November. In China, SSSG has been recording a mid-single-digit decline
quarter-to-date, although the decline narrowed in November (versus October).
Looking ahead, management remains cautious for 2H FY2019, citing the high base in 2H
FY2018, weak macro sentiment and a stronger-than-expected 1H FY2019 (which could indicate
some demand was fulfilled earlier than expected).
Daiwa cut its FY2019-21 net profit by 15-16% to reflect a weaker retail outlook for Hong
Kong & Macau and Mainland China, as well as its lower gross margin estimates from higher
gold product mix. (KL)