1929.HK Stock Today, January 24: Macquarie Lifts Target to HK$19.8
Chow Tai Fook stock advanced on January 24 after Macquarie raised its price target to HK$19.8, citing stronger-than-expected Q3 and a gold price tailwind. Shares of 1929.HK closed at HK$14.12, up about 3%. Same-store sales rose 21.4% in Mainland China and 14.3% in Hong Kong and Macau, with momentum heading into Lunar New Year. Management noted tighter January discounting and higher marketing spend. We explain what this means for earnings power, valuation, and the next catalysts for Chow Tai Fook stock.
Why Macquarie Lifted Its Target to HK$19.8
Macquarie points to operating leverage, improving product mix, and a supportive gold price as key margin drivers. Higher gold prices raise average ticket sizes and favor gold jewelry, while better mix in gem-set pieces lifts gross margin. Cost discipline and scale benefits further help operating margin. Together, these factors underpin a healthier earnings outlook that supports a higher fair value for Chow Tai Fook stock.
Macquarie lifted its target to HK$19.8 after a stronger Q3 print and better near-term visibility source. CLSA also raised its target by 9%, citing the same gold price tailwind and improving sales quality source. Another house reiterated Buy. Street tone is turning more positive as estimates adjust to stronger comps and better margin visibility.
Sales Trends Into Lunar New Year
Q3 same-store sales rose 21.4% in Mainland China and 14.3% in Hong Kong and Macau, reflecting strong festive demand and travel normalization. Early Lunar New Year foot traffic appears supportive. The rebound is broad-based across gold and gem-set categories. This trend gives Chow Tai Fook stock a near-term revenue cushion and better operating leverage as fixed costs spread over higher volumes.
Management and brokers highlighted tighter January discounts and higher marketing spend. Net impact should be manageable if ticket sizes continue to benefit from the gold price tailwind and mix upgrades. Promotions may shift toward targeted offers rather than blanket markdowns, helping protect gross margin. We will watch conversion rates and average selling prices to gauge sustainability through the holiday period.
Valuation, Dividends, and Balance Sheet
At HK$14.12, the shares trade at 23.75x TTM earnings, 5.74x book, and 1.56x sales. EV/EBITDA is about 15.8x, with ROE near 23.3%. Our system grade is B+ with a Buy bias, and a model-implied 12‑month fair value near HK$19.22. These metrics suggest moderate growth expectations are priced in, while upside could come if margins hold post-holiday for Chow Tai Fook stock.
The TTM dividend yield is about 3.82% with a payout ratio near 89%. Current ratio is 1.50, debt-to-equity about 1.47. Inventory days are elevated at roughly 362, keeping the cash conversion cycle long. That is typical for jewelry but remains a key watch item. Sustained free cash flow and controlled capex will be important for dividend stability and balance sheet flexibility.
Price Action and Levels to Watch
The stock closed at HK$14.12, within a HK$13.76 to HK$14.41 intraday range. It sits above the 50-day average of HK$13.50 and the 200-day of HK$13.39. RSI is 42, ADX 22, and the MACD histogram is slightly positive. Volume reached 34.24 million versus a 15.28 million average, signaling active participation as investors reassessed Chow Tai Fook stock.
Near-term support sits around HK$13.80, with resistance at the 52-week high of HK$16.95. Catalysts include Lunar New Year sales read-throughs, further broker revisions, and gold price trends. The next earnings update is scheduled for 4 June 2026. Watch whether marketing spend and pricing discipline offset any softer traffic after the holiday boost.
Final Thoughts
Macquarie’s HK$19.8 target reflects improved margins from operating leverage, a better mix, and the gold price tailwind. Q3 same-store sales growth of 21.4% in Mainland China and 14.3% in Hong Kong and Macau supports near-term momentum. At HK$14.12, valuation is not stretched if margins hold, though the high payout ratio and long cash conversion cycle deserve attention. We would track HK$13.80 as near-term support and HK$16.95 as resistance. Into Lunar New Year, focus on ticket sizes, pricing discipline, and any updates from brokers. If gold remains firm and promotions stay targeted, Chow Tai Fook stock may have room to rerate toward mid-teens earnings multiples.
FAQs
Is Chow Tai Fook stock a buy after the Macquarie upgrade?
Sentiment improved as Macquarie set a HK$19.8 target and peers turned positive. At HK$14.12, it trades at 23.75x TTM earnings with a 3.82% yield. Upside depends on margins holding after Lunar New Year. We see a constructive setup, but watch inventory days, discounting, and gold price volatility.
What drove the Q3 same-store sales growth?
Demand recovered across regions, with Mainland China up 21.4% and Hong Kong/Macau up 14.3%. Higher gold prices lifted average ticket sizes, while mix improvements supported margins. Better traffic into the festive season and stable product availability also helped. The key is whether this pace can sustain beyond the holiday period.
How do gold prices affect the company’s earnings?
A firm gold price raises average ticket sizes and drives interest in gold jewelry, providing a revenue and margin lift. It can also pressure costs, but improved pricing and mix usually offset this. For earnings, sustained strength offers a tailwind, while sharp pullbacks could weigh on demand and pricing power.
What levels and dates should investors watch now?
Key levels are HK$13.80 support and HK$16.95 resistance. The 50-day average at HK$13.50 is another reference. Near-term catalysts include Lunar New Year trading updates, any broker estimate changes, and the next earnings date on 4 June 2026. Gold price trends remain a core driver to monitor.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
