报告名称：Chow Tai Fook(01929.HK)Signs of weakness continue to linger
报告类型：港股研究
报告日期：2016-01-13
研究机构：招商证券（香港）
股票名称：CHOW TAI FOOK
股票代码：01929
页数：10
简介：3Q16 SSSG fell 15% with HK/Macau: -23% and Mainland China (MC): -6% despite improvements in 2Q16 from mini gold rush
Maintain NEUTRAL given weak HK/Macau market outlook while MC market remains uncertain
Signs of turnaround remain elusive
In line with recently announced retail sales figures in both HK and MC, CTF's HK/Macau outlook remains weak while we stay uncertain whether SSSG in MC has bottomed out. In terms of the overall market, HK continued to post declining YoY growth for jewellery/watch/valuable gifts sales with 2015 Jan-Nov decline of 15% YoY due to the stronger USD, political instability as well as the slowdown (-2% YoY in 2015 Jan-Nov) and decline in quality of visitor arrivals (supported by the decrease in contribution of overnight Chinese visitors) and weak local consumer sentiment. As for MC, though faring better than HK (2015 Jan-Nov YTD growth of 7% YoY), its jewellery sales remained highly volatile, hampered by the current economic slowdown.
3Q16 SSSG dippedagain after mini gold rush in 2Q16
As for CTF's 3Q16 (Oct-Dec 2015) operations update, overall group SSSG declined 15% (HK/Macau: -23%, MC: -6%), mainly driven by volume decline. The group will continue to consolidate HK POS and streamline operations while focusing on lower ASP items. Regarding HK rental, although the group is seeing a decline in street shop rental of 20%-30%, shopping malls rental remained stable, resulting to an overall rental decline of about 15% in renewed rental in HK. We expect CTF's 4Q16E to be similar to 3Q16 as we see a lack of catalyst for any turnaround in SSSG for both HK/Macau and MC. We now expect a 7% YoY decline in FY16E revenue and a 34% YoY decline in earnings as we lower our FY16E-18E earnings by 13%/13%/12% (lower FY16E HK/Macau and MC SSSG from 12% to 19% and from 0% to -3% respectively). Our FY16E-18E EPS are -2%/-3%/-4% vs consensus.
Maintain NEUTRAL with new TP HK$4.34
We set a new TP of HK$4.34 on lower EPS and target FY17E P/E of 11x (2SD below forward mean P/E of 17x), justified by the worsening outlook vs its past. Our target P/E is at a premium to current sector average of 8x given CTF's market leadership and better stock liquidity over its peers.

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