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Jewellery Market Remains Tough, Maintain “Sell”
内容摘要
The FY2015 annual results of the Company were generally in line with market consensus and our expectation. Total revenue declined by 17.1% yoy to HKD 15.92 billion, while net profit attributable to shareholders’ was down 13.4% yoy to HKD 1.61 billion.

We expect the Company to continue to record negative SSSG in FY2016 due to unfavorable operating environments. We expect mainland tourists arriving in Hong Kong to start to slow down or even decline in 2015 and mainland jewellery markets are also confronting unfavorable operating environments.

We expect the Company to slow down its expansion speed in Mainland China due to unfavorable operating environments. We expect the Company to continue expanding its jewellery retail network over the next three years in Mainland China, but at a lower speed.

We expect the gross margin of the Company to maintain at the level of about 24.0% in the next three years.

Revise down TP to HK$ 18.40 and maintain “Sell”.