UBS Group's report states that Chow Tai Fook (01929.HK) achieved expected performance in the mid-2025 fiscal year, with revenue declining by 20.4% to 39.4 billion yuan, net profit dropping by 44.4% to 2.5 billion yuan, both matching the preliminary performance disclosed on October 22. Operating profit for the period increased by 4% year-on-year to 6.8 billion yuan, indicating operating profit margins in mainland China and other markets at 18.3% and 11.6% respectively, up by 4.1 and 2.9 percentage points year-on-year.

The bank has raised the adjusted earnings per share forecast for Chow Tai Fook for the 2025 to 2027 fiscal years (excluding the impact of gold loans) by 9% to 18%, to reflect the expansion of gross margin. The target price has been revised from 8.55 yuan to 9.7 yuan, equivalent to 10 times and 9.7 times the forecast P/E ratio for the fiscal years 2025 and 2026. Despite short-term demand pressures, the bank expects the company to consolidate its leading market share position by introducing iconic product series and optimizing existing channels for brand transformation, maintaining a 'buy' rating.