UBS released a research report indicating that CHOW TAI FOOK's (01929) sales performance for the fourth fiscal quarter of 2026 (the three months ending March) was broadly in line with downwardly revised market expectations. This was attributed to pressured demand in Mainland China, which was offset by stronger-than-expected demand in other markets. During the period, the group's overall sales decreased by 1.5% year-on-year. Sales in the mainland market fell by 8.2%, while markets outside the mainland saw growth of 58.5%. In terms of same-store sales growth, mainland retail stores recorded a positive 0.2%, mainland franchise stores recorded a negative 5.8%, and other markets recorded a positive 40.1%. Sales through the Hainan duty-free channel increased by 141% year-on-year, and international market sales grew by 20%. UBS assigned the group a "Buy" rating with a target price of HK$18.5.
Management maintained its guidance for the 2026 fiscal year, expecting revenue to achieve low to mid-single-digit growth and same-store sales growth to reach mid to high single digits. The gross profit margin is forecasted to be between 31.5% and 32.5%, with hedging losses expected to be similar to the HK$6.2 billion recorded in the 2025 fiscal year. Guidance for the 2027 fiscal year will be provided in June when the full-year results are announced.
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