Goldman Sachs: Neutral rating on CHOW TAI FOOK (01929) with a target price of 10.5 Hong Kong dollars.

Goldman Sachs released a research report stating that it gives CHOW TAI FOOK (01929) a "neutral" rating, based on a 3.5 times 2025 fiscal year price-to-book ratio, with a target price of 10.5 Hong Kong dollars. At the Goldman Sachs China Investment Conference on September 11, 2024, CHOW TAI FOOK mentioned that the total retail sales value (RSV) pressure in the Mainland and Hong Kong and Macao markets in July and August was similar to that of the June quarter. The company is more cautious about store expansion, expecting a closure rate of 5%-7% this year, so it will be more cautious in opening new stores, prioritizing store productivity. Furthermore, the management still has confidence in achieving a target return on equity (ROE) of 25% for the 2025 fiscal year. The dividend payout ratio is expected to remain stable at 70%-80%, with limited cash flow pressure to de-stock. The company hopes to improve its net debt ratio from 78% at the end of the 2024 fiscal year to 50-60% (including gold loans).