23.11.2023 10:41:16 - Chow Tai Fook Jewellery Group Posts 37.7% Growth in Core Operating Profit to HKUSD5,989 Million For 1HFY2024 Led By Positive Impact From Ongoing Transformation

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EQS Newswire / 23/11/2023 / 17:40 UTC+8

Chow Tai Fook Jewellery Group Posts 37.7% Growth in Core Operating Profit to HKUSD5,989 Million For 1HFY2024 Led By
Positive Impact
From Ongoing Transformation

Chow Tai Fook Jewellery Group announces FY2024 interim results

Results Highlights
-- In transition to higher value growth, we are focusing our efforts and making significant strides towards
executing our five strategic priorities as part of the transformation journey: brand revamp, product optimisation,
accelerated digitalisation, operational efficiency and talent cultivation.
-- Notable progress in rationalising our product portfolio and optimising the product planning process.
During the period, we successfully launched new designs of
HUÁ Collection and our HEARTS ON FIRE brand launched its VELA Collection.
-- Improvement in mobility and retail activity in our key markets during the first half of FY2024
("1HFY2024") drove a 6.4% year-on-year increase in revenue to HKUSD49,526 million. The growth would amount to 11.3%
on a constant exchange rate basis. In Hong Kong, Macau and other markets, revenue grew 57.7% during the period due
to improved inbound tourism with the progressive return of Mainland tourists.
-- Core operating profit increased 37.7% to HKUSD5,989 million, outpacing revenue growth. This was led by
ongoing efforts in optimised pricing strategy and operational efficiency enhancement, coupled with the benefits
from gold price surge. On a constant exchange rate basis, it was up 44.3% YoY.
-- In line with our commitment to enhancing earnings quality, adjusted gross profit margin improved 140
basis points year-on-year to 23.8% while the core operating profit margin expanded by 280 basis points to 12.1% in
the period. This validates our clear focus towards higher value growth and delivering sustainable long-term
stakeholder value creation as we chart steady progress in our transition.


2023        2022 
Financial Summary                                  HKUSD million HKUSD million YoY Change 


For the six months ended 30 September
Revenue 49,526 46,535 +6.4% Gross profit 12,344 10,962 +12.6%
Gross profit margin                                24.9%       23.6% 
Adjusted gross profit margin(1)                    23.8%       22.4% 

Core operating profit(2) 5,989 4,349 +37.7% Core operating profit margin(2) 12.1% 9.3%
Profit attributable to shareholders of the Company 4,551 3,336 +36.4% Earnings per share (HKUSD) 0.46 0.33 +36.4%
Interim dividend per share(3) (HKUSD) 0.25 0.22 N/A Adjusted gross profit margin, a non-IFRS measure, eliminates the effect of unrealised loss (gain) on gold
1 loans, which the Company believes is useful in gaining a more complete understanding of its operational
performance and the underlying trend of its businesses
Core operating profit and the corresponding margin, a non-IFRS measure, being the aggregate of adjusted
2 gross profit and other income, less selling and distribution costs and general and administration
expenses, which the Company believes is useful in gaining a more complete understanding of its
operational performance and the underlying trend of its businesses
3 The payout ratio for 1HFY2024 approximates 54.9%
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(Hong Kong, China, 23 November 2023) Chow Tai Fook Jewellery Group Limited ("Chow Tai Fook Jewellery Group", the "Group" or the "Company"; SEHK stock code: 1929), today announces its interim results for the six months ended 30 September 2023 ("1HFY2024").

Solid Recovery in Operating Performance

Our efforts in pricing strategy optimisation and operational efficiency enhancement, coupled with the benefits from gold price surge yielded resilient underlying performance during 1HFY2024. The Group's revenue increased 6.4% to HKUSD49,526 million in 1HFY2024 (1HFY2023: HKUSD46,535 million). Gross profit rose 12.6% to HKUSD12,344 million (1HFY2023: HKUSD10,962 million). Adjusted gross profit margin improved to 23.8% from 22.4% in the same period last year. Core operating profit increased 37.7% to HKUSD5,989 million, outpacing revenue growth. On a constant exchange rate basis, it was up 44.3% YoY.

Profit attributable to shareholders rose 36.4% to HKUSD4,551 million (1HFY2023: HKUSD3,336 million) during the period. Earnings per share was reported at HKUSD0.46 (1HFY2023: HKUSD0.33). The Board has declared an interim dividend of HKUSD0.25 per share in 1HFY2024 (1HFY2023: HKUSD0.22), representing a payout ratio of approximately 54.9%.

Dr. Henry Cheng, Chow Tai Fook Jewellery Group Chairman, said: "We are witnessing encouraging progress in our transformation journey and we are confident that through active investment in our five strategic priorities, we will further strengthen our competitiveness and enhance earnings quality as we transition into a new phase of higher value growth."

Robust RSV Growth Fueled by Sustained Improvement of Mobility and Retail Activity

During 1HFY2024, mobility and retail activity continued to improve in the Mainland and Hong Kong and Macau. The Group's retail sales value ("RSV") registered positive growth of 15.6% during the period, driven by Hong Kong, Macau and other markets. RSV in Hong Kong, Macau and other markets jumped 58.5% in 1HFY2024, boosted by the return of inbound tourism in key markets.

Against a high base of comparison, our RSV in Mainland China increased by a notable 10.8%. Furthermore, we saw resilient teens RSV growth during several festive and holiday periods, such as the Labour Day holiday, Chinese Valentine's Day, Mid-Autumn Festival and National Day holiday etc. During the recent Double 11 Festival, we ranked No.1 in the jewellery category on both Tmall and JD.com, with strong GMV growth of close to 90% year-on-year.

In Hong Kong and Macau, the return of inbound Mainland tourists continued support our business, with Same Store Sales Growth ("SSSG") of 59.6% in 1HFY2024. SSS in Hong Kong increased 52.5% during the period while that in Macau jumped 87.3%. SSS in the Mainland was 3.5% lower in 1HFY2024, largely due to the high base of comparison. Centralised Marketing Efforts To Support Targeted Growth

We continued to execute our centralised global marketing campaign strategy in 1HFY2024, to ensure consistency and maximise synergy. In August, we launched our first-ever 360-degree global marketing campaign unveiling the new designs for HUÁ Collection, inspired by the Tang Dynasty artefacts and forged with time-honoured gold-crafting techniques. An immersive launch event was held at the Shaanxi History Museum in Xi'an. Separately, the "GOLD IS CHIC: The Luminous Era" art exhibition was held at Taikoo Li Qiantan in Shanghai, where the lavishly adorned event space offered visitors an immersive sensory experience. The HUÁ Collection continued to register RSV growth of approximately 8% and its contribution stabilised at around 37% in the Mainland. The Collection's RSV achieved a significant growth of over 350% in Hong Kong and Macau.

In addition to the successful HUÁ Collection, our ING Collection and Liu Jin Sui Yue ("????") Collection also received an overwhelming response from the market, particularly among young consumers. These gold jewellery collections contributed around 18% of the RSV of gold products in the Mainland during 1HFY2024.

In championing our pioneering legacy and leadership in craftsmanship and natural diamond jewellery design, we have enriched our diamond strategy with the rollout of signature diamond collections. During 1HFY2024, our HEARTS ON FIRE brand launched the VELA Collection, touting the unparalleled sparkle of signature cut diamonds featuring a French cut pavé setting. Another signature diamond collection, the Chow Tai Fook Dancing Lily Collection, was successfully developed in 1HFY2024.

Our global diamond campaign, which kicked off in September, was led by a diamond-themed exhibition "Beyond Time" in Tai Kwun, Hong Kong. The exhibition showcased resplendent and vibrant diamond pieces alongside immersive art installations that celebrated the magnificent beauty of these precious stones, enhancing consumers desirability for natural diamonds. Following the successful and well-received launch in Hong Kong, we will be bringing our diamond-themed exhibition to Beijing in December 2023 with an aim to connect with our broader base of customers in the Mainland.

Enhancing Store Productivity and Customer Experience for Earnings Quality Growth

The Group is taking a targeted and strategic approach to expansion by opening new stores in locations with strong local market demand, focusing on enhancing store productivity and customer experience. We are also reviewing our store segmentation strategy at our store fronts as part of our brand revamp initiatives. The Group's retail network expanded to 7,838 POS as at 30 September 2023. In 1HFY2024, we opened a net of 189 CHOW TAI FOOK JEWELLERY POS in the Mainland. In Hong Kong and Macau, we refined our store locations and net opened 1 POS during the period. In other markets, we opened 5 stores, including 3 duty-free shops in the Mainland and 2 POS in Thailand and Canada to capture the emerging opportunities from the retail market growth there. Business Outlook

MORE TO FOLLOW) Dow Jones Newswires

November 23, 2023 04:41 ET (09:41 GMT)
Name WKN Börse Kurs Datum/Zeit Diff. Diff. % Geld Brief Erster Schluss
CHOW TAI FOOK JEWEL. HD 1 A1JQKP Frankfurt 0,920 08.07.24 08:10:11 -0,010 -1,08% 0,935 1,010 0,920 0,930

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