[ET Net News Agency, 12 June 2020] Daiwa Research lifted its target price for Chow Tai
Fook Jewellery (CTF)(01929) to HK$8.5 from HK$7.9 and maintained its "buy" rating.
The research house said CTF's management plans to open 400-450 POS in FY2021 n Mainland
China, noting robust expectations in RSV (Retail Sales Value) growth in 2H. In HK & Macau,
management will focus on the store network consolidation and cost rationalisation, with
plans to close 10-15 POS in FY2021, negotiating 25-40% reductions in rent in its upcoming
40+ renewals and plans to apply for the HK Government's employee support scheme.
Daiwa cut its FY2021-22 adjusted EPS forecasts by 9-23%, after factoring in the COVID-19
impact. It believes CTF's accelerated Mainland China expansion will outshine a likely
sustained challenging near-term HK outlook. (KL)