Chow Tai Fook Jewellery Shares Fall After Weak Sales Figures

Dow Jones07-24

By Tracy Qu

Chow Tai Fook Jewellery Group shares fell sharply after the company reported softer sales for the three months ended June.

Shares dropped 5.7% on Wednesday morning to 7.46 Hong Kong dollars (US$0.96), taking year-to-date losses to 36%.

The Hong Kong-listed company said in a filing after market close on Tuesday that fiscal first-quarter retail sales value fell 20% from a year earlier. Chow Tai Fook said Mainland China same-store sales dropped 26%, while Hong Kong and Macau same-store sales slid 31%.

"Coupled with gold price volatility at high levels, we witnessed hiccups in gold jewelry demand in the quarter, a phenomenon observed across the industry," the company said in the filing.

Citi analysts led by Tiffany Feng said in a research note that the company's first-quarter sales figures missed their expectations.

Citi expects near-term pressure on Chow Tai Fook's operations, and cuts its fiscal 2025-2027 net profit estimates by 13%-27%. It maintained a buy rating on the stock given "appealing valuation," but lowered its target price to HK$11.40 from HK$14.20.

Daiwa analysts Carlton Lai and Sybil Hu said they are turning "more pessimistic for the remainder of fiscal year 2025" after first-quarter sales results.

"We believe the elevated gold prices are curbing the retail demand for gold," the Daiwa analysts said. They downgraded the stock to underperform from buy, and cut the target price to HK$7.00 from HK$14.00.

Write to Tracy Qu at tracy.qu@wsj.com

(END) Dow Jones Newswires

July 23, 2024 22:59 ET (02:59 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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They downgraded the stock to underperform from buy, and cut the target price to HK$7.00 from HK$14.00. \n\n\n \n\n\n  Write to Tracy Qu at tracy.qu@wsj.com \n\n\n \n\n\n  (END) Dow Jones Newswires\n\n\n  July 23, 2024 22:59 ET (02:59 GMT)\n\n\n  Copyright (c) 2024 Dow Jones & Company, Inc.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2453804814"}