Nomura lowered its target price for Chow Tai Fook Jewellery (01929) to HK$7.8 from HK$10.1 and maintained its "buy" rating.
The research house said 2Q FY2020 SSSG for HK declined further to -42% versus -11% in 1Q. China SSSG also weakened from +11% in 1Q to -7% in 2Q. In particular, gold sales were negatively affected by the surge in gold prices, with gold SSSG in China down by 15% and in HK down by 49%.
Nomura lowered its FY2020/21 earnings forecasts by 23%/18% to reflect lower sales and margin.
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