Chow Tai Fook’s profit soars 21pc to $6.5b

Chow Tai Fook Jewellery (1929) said its net profit rose 20.7 percent year-on-year to HK$6.5 billion for the year ended March, but faced pressures from surging gold prices this year.

It declared a final dividend of HK$0.3, 7.1 percent higher than a year earlier, but the total payout decreased by 54.9 percent without a special dividend.

The jewelry maker’s revenue increased 14.8 percent to HK$108.7 billion, with 82.5 percent from mainland business. Same-store sales increased by 1.8 percent and 42.4 percent in mainland and two SARs, benefiting from the strong demand for gold jewelry and recovering tourism in Hong Kong and Macau.

Revenue from gold jewelry grew robustly, with an increase of 22.5 percent, and accounted for 82 percent of the total revenue. But revenue from the gem-set, platinum and K-gold jewelry industry fell 13.3 percent, “influenced by the challenging external macro-economic environment.”

The gross profit margin dropped from 22.4 percent a year earlier to 20.5 percent in fiscal 2024 due to “changes in product and wholesale mix.”

However, the surging gold prices and its fluctuations pressured its business in the new fiscal year. Its retail sales value dropped 20.2 percent yearly in April and May, with same-store sales down by 27.6 percent and 32 percent in mainland and the two SARs, respectively.

The same-store sales of gold jewelry and products dropped 29.8 percent and 34.6 percent in mainland China, and two SARs, as the gold price continued reaching record-highs in two months.

Kent Wong Siu-kee, managing director, said he was confident in the market this year, citing the second half of the year was usually the traditional peak season, and its new products launched in April outperformed its peers.

Wong believed that the market now needs voices to guide consumers in their spending, especially in buying jewelry.

As of end-March, it had a total of 7,403 stores in the mainland, a net increase of 143 compared to 12 months ago, with “a healthy ramp-up across new stores in lower tier cities.”

In Hong Kong and Macau, it opened two new stores in the fiscal year.

As of March, the group had a total of 87 stores in two SARs.

The company said it stays “cautiously optimistic” for the fiscal year 2025 despite the uncertain market conditions and will continue to maintain disciplined cost management.