By Tracy Qu


Chow Tai Fook Jewellery's shares fell after the Hong Kong-based jeweler reported a surprise net closure of stores in China in the latest quarter, causing analysts to flag risks to their expansion estimates.

Shares were 8.1% lower in afternoon trade Monday at HK$10.44 (US$1.33), on track for their biggest one-day drop this year.

Chow Tai Fook said late Friday that it closed a net 89 point of sales in mainland China in the first three months of the year, even as group retail sales rose 12% on year.

Jefferies analysts led by Anne Ling said the closures surprised investors, and that cautious guidance for the new fiscal year beginning April creates downside risk to their net store opening expectations of 350 in each of the next two fiscal years. In a research note they highlighted a downward trend in the company's own expectations, coming after Chow Tai Fook last November revised expected store openings to 300-400 from the 600-800 it said it June it expected.

Jefferies kept a buy rating and HK$17.02 target price on shares.

Citi analysts said the retail sales value growth beat their expectations, adding that shift to enhancing store quality appeared to keep the net closure from hurting sales. The analysts kept a buy rating on the stock with a target price of HK$14.20.


Write to Tracy Qu at tracy.qu@wsj.com


(END) Dow Jones Newswires

04-15-24 0303ET