Chinese jewellery retailer Chow Tai Fook Jewellery Group Ltd reported a 15% rise in revenue year-on-year and a 40% jump in core operating profit during the six-month period ended September 30, 2017 (H1 FY2018), driven by a continuing recovery in its main markets, Mainland China as well as Hong Kong Macau.

Releasing interim results for the period, the Company said that its revenue during the period rose by 15% to HK$ 24,754 million (1HFY2017: HK$ 21,526 million), and core operating profit surged by 40.3% to HK$ 2,396 million (1HFY2017: HK$ 1,708 million), on account of improving sales momentum and operating leverage.

The Company said that the recovery was evident across geographies with Same Store Sales in Mainland China increasing by 10.3%, mainly driven by an increase in average selling price, and that of Hong Kong and Macau rising by 9.5%, primarily driven by volume.

Chow Tai Fook also reported that that its jewellery e-commerce business in Mainland China further accelerated in 1HFY2018, registering an impressive Retail Sales Value growth of 120.4%, mainly thanks to a strengthened co-operation with major online platform partners. It contributed to 5.4% of retail sales value and 13.4% of retail sales volume in the jewellery business of Mainland China.

In terms of business segments, retail, which accounts for over 80% of revenue, grew by 11.4% to HK$ 20,456 million (1HFY2017: HK$ 18,370.4 million), while the wholesale segment rose by 36.2% to HK$ 4,298.3 million (1HFY2017: HK$ 3,155.7 million).

In terms of product, the increase in revenue was driven primarily by a 19.7% leap in sales of gold products to HK$ 11,515.3 million (1HFY2017: HK$ 9,622.8 million), which compensated for a 1.6% drop in sales of gem-set jewellery to HK$ 4,965.3 million (1HFY2017: HK$ 5,043.3 million), the retailer reported.

In 1HFY2018, the Group opened a net of 107 POS, bringing the total number of POS to 2,488 as at 30 September 2017.

Chow Tai Fook said it believes that FY2018 will be a turning point for the Group’s business given the jewellery market recovery, and although it will be gradual and mild, the industry is expected to return to a stable yet sustainable growth.