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Thursday, June 06, 2019, 23:20
Chow Tai Fook registers profit growth of nearly 12 percent
By Dai kaiyi
Thursday, June 06, 2019, 23:20 By Dai kaiyi

Chow Tai Fook Jewellery Group plans to broaden its customer base by offering a wider range of products and a multibrand strategy, while deepening its market penetration on the Chinese mainland — especially in third- and fourth-tier cities. (AARON TAM / AFP PHOTO)

Chow Tai Fook Jewellery Group, Hong Kong’s leading jewelry retailer, posted annual profit growth of 11.8 percent for the 2019 fiscal year, boosted by stronger gold-product sales and recovering same-store sales growth.

The world’s largest listed jeweler by market value saw its profit attributable to shareholders rise to HK$4.577 billion ($584 million), from HK$4.095 billion a year ago. Its revenue recorded a 12.7 percent surge — from HK$59.16 billion in 2018 to HK$66.66 billion.

The Hong Kong-based company declared a final dividend of HK$0.20 per share, up 33.3 percent from last year’s dividend. It also claimed a special dividend of HK$0.30 per share.

The group’s adjusted gross profit margin, up by 70 basis points, was 27.9 percent.

The price of gold, though near a 2019 high because of a recent rally, is still cheaper than it was four years ago, according to Kent Wong Siu-kee, Chow Tai Fook Jewellery Group’s managing director, adding that a mild uptick of the gold price wouldn’t have much of an impact on the company’s retail sales.

The key factors necessary for the company to thrive are product development, and innovation in operation and sales, he added.

The scope of the consecutive decline of Hong Kong’s retail sales in the recent few months has been under control, and given the high-base effect from the first half of 2018 — during which the company notched a sales growth of over 20 percent — the downtrend at the moment is actually a process of “normalization,” Wong said.

Wong said he believes retail performance will be better in the second half of the year.

Hong Kong retail sales in April fell 4.5 percent due to lackluster growth in tourist arrivals compared with the same period a year ago, marking the third month in a row the number of arrivals fell.

Looking forward, the group holds an optimistic albeit cautious outlook on its performance in the 2020 fiscal year, in the wake of economic concerns on a global scale.

The company plans to broaden its customer base by offering a wider range of products and a multibrand strategy, while deepening its market penetration on the Chinese mainland — especially in third- and fourth-tier cities, group Chairman Henry Cheng Kar-shun said.

Additionally, the company is going to invest in big data and inventory management analytics in an attempt to run the business in a more efficient manner, Cheng said.

kevindai@chinadailyhk.com

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