Chow Tai Fook's Fixed-Price Products Likely to Drive Revenue Growth

Dow Jones09-21

0244 GMT - Chow Tai Fook Jewellery's fixed-price products are likely to drive revenue growth in the coming years, Morningstar's Jeff Zhang says in a note. Fixed-price gold products are sold at a set price that remains unaffected by fluctuations in the international gold market. Chow Tai Fook's fixed-price product revenue could be boosted by strong craftsmanship and gradually rising gold prices, the analyst says. He estimates these factors could raise Chow Tai Fook's fixed-price product revenue mix to 45% by FY 2031. While a decline in gold prices could pressure the company's earnings, he says a stronger cost discipline should provide a buffer. Morningstar starts its coverage of Chow Tai Fook with a fair-value estimate of 14.50 Hong Kong dollars. Shares fall 1.0% to HK$10.94.

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