JP Morgan maintains a "overweight" rating on CHOW TAI FOOK (01929) with a target price raised to 11.4 Hong Kong dollars.

JPMorgan released a research report stating that the target price of CHOW TAI FOOK (01929) has been raised by 35.7% from HK$8.4 to HK$11.4, maintaining a "overweight" rating. The firm raised profit forecasts for CHOW TAI FOOK for the fiscal years 2025-2027 by 1-5%. Profit forecasts for CHOW TAI FOOK for the fiscal years 2026-2027 are 7-9% higher than market consensus, driven mainly by: 1) potential ongoing optimization of store network in fiscal year 2026, with a slowdown in net store closures in fiscal year 2025; 2) continued increase in contribution from fixed price products. CHOW TAI FOOK's performance in the fourth quarter of the fiscal year 2025 showed continuous improvement in Retail Sales Value (RSV), with a 12% decrease compared to the previous quarters. The Chinese market continued to improve, while the markets in Hong Kong and Macau remained stable. This indicates that the full year revenue guidance has been achieved. For the fiscal year 2026, JPMorgan predicts a 33% increase in net profit for CHOW TAI FOOK, mainly driven by: 1) positive sales growth; 2) continued improvement in product mix; 3) improvement in store efficiency.