Gold Jewelry, New Stores Drive Chow Tai Fook's Revenue and Profit

11/06/2019 13:18

Hong Kong based jewelry retail and bellwether for the Chinese market Chow Tai Fook Group (CTF) has announced that its sales grew 13% to $8.5 billion (HK$66,661 million) for the year ending March 31 (FY2019), citing increased purchases of gold jewelry and an expansion of the company’s retail network in China. Retail sales in Mainland China rose by 8% to $3.88 billion, while revenue from Hong Kong and Macau increased 12% to $2.94 billion. All product categories exhibited positive growth in FY2019, but gold was the company’s strongest seller during the period, the group noted in a press release. Group sales of gold surged 13% to $4.07 billion for the year, while revenue from gem-set jewelry rose 4.5% to $1.55 billion. The revenue contribution of gold products increased to 61.1%. CTF added a net 549 new points of sale in Mainland China, increasing their outets to 3,134 as of March 31.

CTF's same-store sales in Mainland China increased 3.4%, while those in Hong Kong and Macau rose 9%. China exhibited growth throughout the fiscal year, while Hong Kong and Macau noted a 19% increase in the first half, followed by a flat second half as economic uncertainty dampened consumer sentiment. Net profit leaped 11% to $597.4 million for the year. Net profit leaped 11% to HKD 4.68 billion ($597.4 million) for the year.

"In light of the macro headwinds and a tough comparison base as we head into 1HFY2020, the Group is cautiously optimistic for FY2020," the company explained. "The US-China trade talks may take some time to settle. Nonetheless, with the stimulus measures from the Chinese government such as lowering reserve requirement ratio, various tax cuts, spurring lending, particularly to small and medium-sized companies and enlarging infrastructure spending, we believe these would help to mitigate the impact on the economy and consumer sentiment. As to grab a greater market share and optimise the Group’s brand competence in Mainland China, we will continue to deepen our market penetration strategically in lower tier and county- level cities in Mainland China in the next three to five years."