Goldman Sachs: Maintains a 'Neutral' rating on Chow Tai Fook, with a target price of 8 Hong Kong dollars

Jinshi data, January 7th, Goldman Sachs released a research report stating that it maintained a "neutral" rating on Chow Tai Fook (01929.HK) with a target price of 8 Hong Kong dollars. The company's guidance for the 2025 fiscal year and the second half of the fiscal year remains unchanged. The same-store sales rise (SSSG) in December this quarter is generally the same as the guidance, with a double-digit decline in mainland China and a high double-digit to low 20% decline in Hong Kong and Macau. The report quoted management as saying that there is enough cash flow to support dividend payments, with free cash flow in the second half of the 2025 fiscal year reaching 10 billion Hong Kong dollars, enough to support capital spending and a dividend payout ratio of 70-80%. Management also holds a cautious attitude towards the company's performance during the Lunar New Year, and underperforming stores will continue to close in 2026. If sentiment remains weak, management believes that 6000-6500 stores can continue. The company also has brand upgrades and has opened new concept stores in mainland China. The company also plans to open 20-30 new Chow Tai Fook heritage series stores in mainland China.