Chow Tai Fook, the leading jewellery retailer in Mainland China, announced its financial results for the six months ended 30 September 2023, showing a strong recovery from the impact of the pandemic. The company reported a 6.4% year-on-year increase in revenue to HK$49.5 billion, driven by improved mobility and retail activity in its key markets. On a constant exchange rate basis, the revenue growth was 11.3%.
The company’s core operating profit increased 37.7% year-on-year to HK$5.98 billion, outpacing revenue growth. This was attributed to the company’s optimised pricing strategy and operational efficiency enhancement, as well as the benefits from gold price surge. On a constant exchange rate basis, the core operating profit growth was 44.3%.
The company also improved its earnings quality, as reflected by the adjusted gross profit margin of 23.8%, up 140 basis points year-on-year, and the core operating profit margin of 12.1%, up 280 basis points year-on-year. The company said that this validates its clear focus towards higher value growth and delivering sustainable long-term stakeholder value creation as it charts steady progress in its transition.
As at 30 September 2023, the company had a total of 7,458 Chow Tai Fook Jewellery points of sale in Mainland China. The company said that it is focused on enhancing store productivity and customer experience by leveraging on its existing retail network. The company also said that its brand revamp is on track to strengthen its competitiveness, with the unveiling of new designs for the HUÁ Collection and the launch of the first-ever 360-degree global marketing campaign in 1HFY2024.
The company expressed confidence in the Mainland China jewellery market, citing the steady recovery of China’s economy in 2023, thanks to the effective policy support from the Central Government, such as the consumption stimulus to encourage spending in rural areas and boost consumer sentiment. The company reported a significant boost in store traffic and business recovery in various regions, due to the return of Mainland tourists.
Hong Kong and Macau experienced a rapid acceleration as popular destinations to Chinese tourists. Business recovery in ASEAN also gained strong traction, supported by both domestic consumption and tourist expenditure. The company said that it will stay responsive and agile to remain at the forefront of markets with strong retail demand.