Chow Tai Fook Jewellery Group (1929) H2 2026 earnings summary

Executive summary

• Achieved record-high revenue of HK$94,398 million in FY2026, up 5.3% year-over-year, with operating profit rising 27.8% to HK$18,850 million and profit attributable to shareholders up 52.2% to HK$9,004 million.

• Operating profit margin reached 20%, the highest in five years, and gross profit margin expanded to 32.3%, reflecting successful brand transformation and product optimization.

• Strategic focus on brand transformation, product innovation, digitization, operational efficiency, and talent cultivation drove performance.

• Board proposed a final dividend of HK$0.45 per share, bringing the full-year total to HK$0.67 per share, with a payout ratio of 73.4%.

• Transformation initiatives included global flagship store launches, expansion into high jewellery, and international market entries.

Financial highlights

• Revenue: HK$94,398 million (+5.3% YoY); Operating profit: HK$18,850 million (+27.8% YoY); Gross profit margin: 32.3% (+2.8 pts YoY); Net profit margin: 9.6%.

• SG&A ratio improved to 13.1% of revenue, down from 13.9% in FY2025.

• Return on equity reached 28.4%, with net gearing ratio at 54.4% (11.6% excluding gold loans).

• Inventory turnover period increased to 364 days, mainly due to higher gold prices; inventory value rose 15% to HK$64 billion.

• Free cash flow was HK$7,795 million; bank balances and cash at year-end were HK$8,262 million.

Outlook and guidance

• Entering a definitive phase of multi-year transformation, focusing on brand desirability, retail experience, and product differentiation.

• Confident in sustaining above-market revenue growth and maintaining ROE above 25% in the medium term; targeting 50% reduction in GHG emissions by FY2030 from FY2024 baseline.

• Plans to expand luxury format stores in Mainland China from 8 to 50 by FY2030 and complete renovation of all POS by FY2030.

• Intends to double RSV in international markets with over 100 stores in prime locations by FY2030.

• Cautiously optimistic on market outlook despite macroeconomic uncertainties; committed to financial discipline and sustainable earnings.