[ET Net News Agency, 22 September 2020] J.P. Morgan raised its target price for Chow
Tai Fook Jewellery (CTF)(01929) to HK$12.5 from HK$8.5 and maintained its "overweight"
rating.
The research house said CTF's share price has rallied by 27% since late August. JPM said
that hardline goods would likely see stronger growth momentum in 3Q. It believes the
Street has underestimated CTF's sales growth and margin expansion, and that would be
tweaked up over the coming quarters.
JPM said CTF recorded a 50% SSS decline in China during 4Q FY2020 (three months ended in
March 2020) due to the impact of COVID-19. Assuming that CTF can maintain the current
recovery momentum and deliver pre-COVID-19 sales levels in 4Q FY2021, growth for the
quarter should be 100%. (KL)