China’s Chow Tai Fook Jewellery Group reported a 12.47% rise in revenue in FY2019, with the robust performance driven by positive growth across all categories, with relatively stronger results for gold products, as well as a significant rise in new store openings.

Releasing its results yesterday, the Company said that revenue for the year stood at HK$ 66,661 million (FY2018: HK$ 59,156 million), while gross profit amounted to HK$ 18,602 million (FY2018: HK$ 16,213 million).

Adjusted gross profit margin was up by 70 bps to 27.9% in FY2019. Core operating profit surged by 24.4% to HK$ 6,972 million (FY2018: HK$ 5,606 million), thanks to an increase in adjusted gross profit margin and the benefit of operating leverage. Core operating profit margin improved by 100 bps to 10.5%.  

Profit attributable to shareholders of the Company rose 11.8% to HK$ 4,577 million (FY2018: HK$ 4,095 million) and basic earnings per share were reported at HK$ 0.46 (FY2018: HK$ 0.41).

The jeweller reported that while Same Store Sales Growth (SSSG) in Mainland China and Hong Kong and Macau was 3.4% and 8.7% respectively, both markets actually witnessed a weaker performance in the second half of FY2019 against a volatile macro backdrop. In China, the rise in FY2019 was a result of a higher average selling price (ASP) supported by an increase in the average weight per gold product sold, while in Hong Kong and Macau there was growth both in ASP as well as in volume terms.

The share of gold products in retail sales rose, with the segment reporting revenue of HK$ 31,892.3 million (FY2018: HK$ 28,159.3 mn), while gem-set jewellery accounted for HK$ 12,187.7 mn (FY2018: HK$ 11,659.1 mn).

The Group’s POS amounted to 3,134 as at 31 March 2019. In FY2019, net openings in Mainland China reached 539 POS in which a majority was franchised, echoing the Group’s effort to deepen the penetration into the lower tier cities. Of these, 2,803 were Chow Tai Fook Jewellery POS (Net openings in FY2019: 486). The Group also opened a net of 8 POS in other markets including its first stores in Cambodia and Vietnam. 

 E-commerce business recorded a RSV growth of 13.2% in FY2019, contributing to 4.8% of RSV and 13.6% of retail sales volume in Mainland China. Average daily online traffic reached 487,000 unique visitors.

The Group said it is “cautiously optimistic for FY2020” in light of the “macro headwinds and a tough comparison base” even as it continues to implement the “Smart+ 2020” three-year strategic framework, launched since FY2018 as the backbone for its business development and transformation.