Chow Tai Fook Jewellery Group (1929) H2 2024 earnings summary

Executive summary

• Achieved record revenue of HK$108.7 billion, up 14.8% year-over-year, and core operating profit of HK$12.2 billion, up 28.9%.

• Profit attributable to shareholders rose 20.7% to HK$6.5 billion; EPS increased to HK$0.65.

• Return on equity improved to 24.7% from 16.5% in FY2023.

• Board proposed a final dividend of HK$0.30 per share, total annual dividend HK$0.55, payout ratio 84.6%.

• Brand transformation, new collections, and digitalisation initiatives supported growth.

Financial highlights

• Revenue grew 14.8% year-over-year to HK$108.7 billion; constant currency growth 18.5%.

• Adjusted gross profit margin moderated by 90 bps to 22.8% due to higher gold sales mix.

• Core operating profit margin improved by 120 bps to 11.2%.

• Operating cash flow (net of leases) was HK$14.6 billion, up 37%; pro forma free cash flow HK$12.5 billion.

• Net gearing ratio 7%-8% (excluding gold loans: net cash); including gold loans: 78.2%.

Outlook and guidance

• Cautiously optimistic for FY2025 amid dynamic and uncertain market conditions.

• Focus on enhancing store productivity, disciplined cost management, and margin resilience.

• Confident in mid- to long-term growth prospects in Mainland China, supported by government policies and resilient jewellery demand.

• Continued ramp-up and maturity of franchised POS expected to fuel sales and profit growth.

• Expect ROE improvement to be sustainable and remain at similar levels.