Chow Tai Fook Jewellery Group (1929.HK): 2QFY27 SSSG on track, 1H NP ahead of GSe with hedging gains likely more than offset GPM

Chow Tai Fook announced a 1HFY27 profit alert and its 2QFY27 (Sep-quarter) trading update after market close. 2QFY27 SSSG is in line with market expectations, with Mainland China up modestly on ASP increase offsetting volume decline and Hong Kong & Macau up strongly on both ASP and volume growth. Reported net profit is expected to increase sharply year on year, mainly attributable to fair value gains from the revaluation of gold loan contracts versus fair value losses a year earlier, along with improved sales performance in key markets. Management acknowledged that GPM/OPM may fall below previous guidance given the gold price pullback and a lower-than-expected fixed-price mix, but hedging gains should offset the pressure at the profit level;