Matters:

The company released unaudited main operating data for January to January 2024. The overall retail value increased by 12.4% year on year. Among them, retail value in the Chinese market (excluding Hong Kong, Macao and Taiwan) increased 12.4% year on year, and the Hong Kong, Macau, China and other markets increased 12.8% year on year. Overall, it maintained steady growth under a high base in the first quarter of last year.

Guoxin Retail's opinion: 1) On the same store side, the company's same-store sales in the Hong Kong and Macau markets continued to grow, achieving 4.5% growth in January-March. Same-store sales in the Chinese market (excluding Hong Kong, Macao and Taiwan) fell 2.7% year on year. Among them, same-store sales of gold jewelry products increased by 3.4%, benefiting from the increase in sales of gold jewelry and ornaments under the Year of the Dragon theme. 2) In terms of opening stores, the company continued to implement plans to strengthen the efficiency of single stores. During the quarter, 94 stores were closed, and the total number of stores was 7,782 at the end of the period. Among them, 89 Chow Tai Fu Jewelry stores in the Chinese market (excluding Hong Kong, Macao and Taiwan) were closed, and the total number of stores was 7548 at the end of the period.

Looking at the whole year, the gold and jewelry industry is still supported by the momentum of continuous growth, supported by gold prices and value-preserving consumer demand. As a leader in gold and jewelry, the company is leading the market in product design and channel layout. It is expected that the company's leading advantage will continue to be strengthened under the trend of increasingly important brand power competition in the industry in the future. We maintained the company's net profit forecast for the 2024-2026 fiscal year at HK$75.3/87.61/HK$9.785 billion, corresponding PE 15.1/13/11.6 times, respectively, and maintained a “buy” rating.