Luk Fook Holdings (International) (0590) investor relations material

Executive summary

• Revenue declined 12.9% year-over-year to HK$13.3 billion, mainly due to high gold prices impacting gold product sales and significant gold hedging losses.

• Profit for the year dropped 39.3% to HK$1.07–1.1 billion, with basic EPS down 37.9% to HK$1.87 and a dividend payout ratio of 59%.

• Gross margin improved by 5.9 percentage points to 33.1%, and gross profit rose 5.8% to HK$4.42 billion.

• Net decrease of 296 shops globally, with 3,287 shops at year-end.

• Membership base grew nearly 23% to over 4.9 million, contributing 55% of retail sales.

Financial highlights

• Gold hedging losses surged to HK$493 million, while prior year included a one-off gain from an acquisition.

• Total operating expenses to revenue ratio rose 4.6 percentage points to 19.6%.

• EBITDA fell 22.5% to HK$2.02 billion; net margin decreased 3.5 percentage points to 8.0%.

• Net cash position turned negative to -HK$205 million; net gearing ratio at 1.6%.

• NAV per share increased 2.2% to HK$22.38.

Outlook and guidance

• Double-digit same store sales growth expected across all regions in FY2026, with nearly 20% growth in Mainland from April to June 2025.

• Three-year strategy (FY2026–FY2028) focuses on overseas expansion, market-oriented products, and operational efficiency.

• Plans to net add 50 shops in Mainland and 20 overseas in FY2026; CapEx budget set at HK$100 million, mainly for shop renovations.

• Stable gold hedging ratio to be maintained at 25–27%.

• Gold prices expected to remain high due to central bank demand and geopolitical tensions.