Chow Tai Fook Jewellery Group Limited · HKEX:1929
Chow Tai Fook Jewellery — 1H FY2025 Earnings Presentation
39 slides from Chow Tai Fook Jewellery's earnings presentation, Nov 26, 2024
Slide 1: HKEX announcement cover: Presentation on 2024/2025 Interim Results
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in relia
Slide 2: 2024/2025 Interim Results Investor Presentation
2024/2025 INTERIM RESULTS INVESTOR PRESENTATION 2024.11.26
Slide 3: 1H2025 Highlights
1H2025 HIGHLIGHTS Resilient operating profitability against macro headwinds Revenue Gross profit margin 1 HK$39,408 million On constant fx 31.4% 1H2024 24.9% 20.4% 20.0% Operating profit 2 Operating profit margin HK$6,776 17.2% 1H2024 million 4.0% 13.2% Profit attributable to shareholders Dividend p
Slide 4: Diligently executing five strategic priorities with focus on brand transformation
1H2025 HIGHLIGHTS Diligently executing five strategic priorities with a focus on brand transformation Brand transformation gains Ongoing product and Improved margins and Preserve and perpetuate rich positive momentum pricing optimisation disciplined spending Chinese cultural heritage • First new con
Slide 5: Brand Transformation
BRAND TRANSFORMATION Progressive rollout of refreshed stores to elevate customer experience Launch new concept store at 42-46 Queen’s Road Central, Hong Kong 4
Slide 6: Optimisation of Product Offerings
OPTIMISATION OF PRODUCT OFFERINGS Exquisite design and craftsmanship to enhance brand desirability Chow Tai Fook CTF Rouge Collection CTF Bond Collection Palace Museum Collection 5
Slide 7: Chinese Gold Craftsmanship Heritage Education Programme
CHINESE GOLD CRAFTSMANSHIP HERITAGE EDUCATION PROGRAMME Enhance appreciation of Chinese gold craftsmanship among younger generation ⚫ Foster the understanding and appreciation of the Chinese gold artistry among younger generation, leading them to contribute to the preservation of Chinese culture and
Slide 8: Business Update
BUSINESS UPDATE CHOW TAI FOOK JEWELLERY GROUP
Slide 9: Mainland China – Chow Tai Fook Jewellery POS
MAINLAND CHINA – CHOW TAI FOOK JEWELLERY POS Prioritise financial health of POS network and sustain market leadership RSV and POS by tier of cities 1 RSV and POS by operating model RSV and POS by store format 17.5% 15.8% 28.9% 20.1% 49.5% 12.0% 23.3% 26.4% 24.0% 43.3% 22.0% 42.0% 76.7% 30.3% 19.0% 4
Slide 10: Mainland China: Omni-channel experience
MAINLAND CHINA Enhance omni-channel experience with high touch engagement POS Network E-commerce Channel ⚫ Net closed 239 CHOW TAI FOOK JEWELLERY POS in 1H2025. Expect net RSV store closure to moderate in 2H2025 based on current observations of the trajectory and market conditions 0.6% ⚫ Stay agile
Slide 11: Hong Kong & Macau of China and Other Markets
HONG KONG & MACAU OF CHINA AND OTHER MARKETS Stay agile in managing the evolving business dynamics RSV and POS by geography Retail Network Management 13.5% Hong Kong and Macau of China 43.2% 68.8% ⚫ Launched the first new concept store in Central, 17.7% 45.8% Hong Kong 11.0% % of % of ⚫ Net closure
Slide 12: Prospect new growth opportunities overseas
HONG KONG & MACAU OF CHINA AND OTHER MARKETS Prospect new growth opportunities in overseas Strategic Expansion in Southeast Asia and Globally RSV (ex China DF) 8.5% ⚫ ⚫ As of Sep 2024, the Group had 61 CHOW TAI FOOK JEWELLERY POS in other markets Senior executive appointment (Ms. Gabriela Ferreira)
Slide 13: Financial Review
FINANCIAL REVIEW CHOW TAI FOOK JEWELLERY GROUP
Slide 14: 1H2025 Income Statement Highlights
1H2025 INCOME STATEMENT HIGHLIGHTS Margin resilience a testament to our focus on earnings quality Revenue Revenue YoY on constant fx HK$39,408 million 20.4% 20.0% Gross profit Gross profit margin HK$12,378 1H2024 million 0.5 % 31.4% 24.9% SG&A SG&A ratio 1H2024 HK$5,978 million 2.8% 15.2% 12.4% Oper
Slide 15: Revenue Breakdown
REVENUE BREAKDOWN Revenue by reportable segment (HK$ m) Revenue by product (HK$ m) (Excluding jewellery trading and service income from franchisees) 49,526 YoY Change YoY Change 49,030 46,535 44,186 46,070 43,746 14.7% 39,408 -20.4% 35.8% 19.1% 38,771 -20.9% 39.6% 22.6% 44.8% 14.9% -20.0% 35.1% -21.
Slide 16: Same Store Sales Growth – Major Markets
SAME STORE SALES GROWTH (“SSSG”) – MAJOR MARKETS Sequential improvement across all operating markets 66.6% 64.2% 55.7% Mainland China (Self-operated) Mainland China (Franchised) Hong Kong & Macau of China 32.4% 8.3% 9.3% 4.5% 22.7% 8.5% -11.4% -19.1% -20.3% -12.3% -2.7% -26.4% -24.3% -18.8% -12.5% -
Slide 17: SG&A Analysis
SG&A ANALYSIS (HK$M) Continued execution of disciplined cost management 13.8% 15.2% 12.4% YoY Change 6,440 % 6,150 % -2.8% 5,978 % Staff costs and related expenses Concessionaire fees 2,452 5.3% Rental expenses 2,528 5.1% 2,549 6.5% 0.8% Depreciation and amortisation (Right-of-use assets, “ROUA”) De
Slide 18: SG&A – Staff Costs and Related Expenses
SG&A – STAFF COSTS AND RELATED EXPENSES (HK$M) Mainland China Hong Kong & Macau of China 11.5% 12.2% 5.6% 8.9% 4.5% 4.5% 1H2025 Average 1H2025 Average YoY Change no. of employees 1 YoY Change no. of employees 1 1,820 1,842 19,040 1,836 1.2% 2,520 546 635 629 -0.9% -5.6% YoY -2.3% YoY 28.5% -16.9% 28
Slide 19: SG&A – Concessionaire Fees and Lease-Related Expenses
SG&A – CONCESSIONAIRE FEES AND LEASE – RELATED EXPENSES (HK$M) Mainland China Hong Kong & Macau of China 8.0% 8.2% 5.7% 8.1% 5.4% 4.2% 4.3% 4.5% 6.3% YoY Change 1,256 YoY Change 319 1,196 304 -4.6% 287 985 -17.6% 23.2% 26.6% 41.0% 76.0% 74.0% 68.1% -24.1% 71.7% 71.0% 55.6% 24.0% 26.0% 31.9% 1.0% 2.3
Slide 20: Reclassification of Gold Loan P/L Impact
RECLASSIFICATION OF GOLD LOAN P/L IMPACT OLD REVENUE NEW REVENUE COGS @ historical cost COGS @ historical cost + FV change of gold loan Realised gain/loss on gold loan REPORTED GP Unrealised gain/loss on gold loan REPORTED GP OPERATING PROFIT + FV change of gold loan Realised gain/loss on settled co
Slide 21: 1H2025 Movements in Gross Profit Margin
1H2025 MOVEMENTS IN GROSS PROFIT MARGIN Driven by the product mix improvement and gold price surge 4.9% 31.4% 2.1% 24.9% 0.1% 0.8% 0.2% 9.8% 3.9% 1H2024 1H2025 Changes in Mainland China, Hong Kong & Macau of China and other markets mix Impact from wholesale business Impact from jewellery trading Cha
Slide 22: Operating Profit and Profitability Analysis
OPERATING PROFIT AND PROFITABILITY ANALYSIS Improving operating margin trend across all operating markets Operating profit by reportable segment (HK$m) Profitability – Mainland China YoY Change 31.2% 25.0% 6,776 22.0% 18.3% 6,514 4.0% 14.1% 12.5% 10.1% 11.5% 13.8% 4,366 1H2023 1H2024 1H2025 88.3% 89
Slide 23: Profit Before Taxation
PROFIT BEFORE TAXATION For the six months ended 30 September YoY 1H2024 1H2025 Change (HK$m) Operating profit 6,514 6,776 262 Major Movement Other gains and losses (182) (3,135) (2,953) Fair value change on gold loan - Fair value change of gold loan 33 (3,065) (3,098) 1H2025 - Net Fx gain / (loss) (
Slide 24: Inventory and Capital Expenditure
INVENTORY AND CAPITAL EXPENDITURE (HK$M) Prudent inventory and capex management amidst market uncertainty Inventory balances by product 1 Capex by function 67,574 63,398 64,593 914 28,826 44.6% 29,518 43.7% 29,795 47.0% 235 32,017 50.5% 34,058 52.7% 36,329 53.8% 474 1,586 2.5% 1,709 2.6% 1,728 2.6%
Slide 25: Summary – Movements in Cash Flows
SUMMARY – MOVEMENTS IN CASH FLOWS (HK$M) Sustained generation of free cash flows despite macro challenges Pro forma free cash flows 2,678 7,761 438 2,703 1,634 308 190 3,134 7,695 3,036 174 3,839 FY2024 1H2025 (31 Mar 24) Operating cash flows before movements in working capital Net repayment in bank
Slide 26: Capital Structure Highlights
CAPITAL STRUCTURE HIGHLIGHTS Effective capital management for financial stability and total shareholder returns Bank deposits and cash equivalents 1 Total Equity As at 31 Mar 24 As at 31 Mar 24 HK$3,839 million HK$7,695 million HK$26,381 million HK$26,746 million Bank borrowings Net gearing ratio 2
Slide 27: Market Outlook
MARKET OUTLOOK CHOW TAI FOOK JEWELLERY GROUP
Slide 28: Market Outlook
MARKET OUTLOOK ⚫ We stay nimble and vigilantly monitor market dynamics and consumption trends which will inform the ongoing calibration of our growth strategy amidst market uncertainty. This also sees us prioritising financial and operational resources in strengthening business resilience and compet
Slide 29: Appendix
APPENDIX CHOW TAI FOOK JEWELLERY GROUP
Slide 30: Appendix I – Reclassification of Gold Loan P/L Impact – FY24
APPENDIX I – RECLASSIFICATION OF GOLD LOAN P/L IMPACT – FY24 (HK$ billion) OLD REVENUE 108.7 REVENUE 108.7 NEW REVENUE 108.7 COGS @ historical cost (82.7) COGS @ historical cost (82.7) COGS @ historical cost (82.7) + Realised gain/loss on + FV change of gold loan (3.7) gold loan (1.2) Realised gain/
Slide 31: Appendix II – Reclassification of Gold Loan Impact
APPENDIX II – RECLASSIFICATION OF GOLD LOAN IMPACT Underlying trend is similar before and after the reclassification 31.4% 30.6% GPM (new) 28.9% AGPM (old) 29.6% 29.3% 28.2% 23.6% 24.0% 24.0% 23.4% 23.7% 22.8% 17.2% OPM (new) 12.9% COPM (old) 12.4% 15.1% 11.0% 10.3% 10.3% 12.3% 11.2% 10.0% 10.1% 10.
Slide 32: Appendix III – Income Statement Summary
APPENDIX III – INCOME STATEMENT SUMMARY For the six months ended 30 September (HK$m) 1H2023 1H2024 1H2025 YoY Change Revenue 46,535 49,526 39,408 -20.4% Gross profit 10,453 12,311 12,378 0.5% Gross profit margin 22.5% 24.9% 31.4% 6.5% pts Selling and distribution costs and general and administrative
Slide 33: Appendix IV – Illustration of Hedging Mechanism
APPENDIX IV – ILLUSTRATION OF HEDGING MECHANISM Gold inventory (Weight) Hedging 100% hedged ratio: 60% Gain in sale of Hedging gold products ratio: US$ 100/oz 50% Gold product value Gold price increase Sale at market price at US $2,500/oz to US$ 2,600/oz US$ 2,600/oz OFFSET Seasonal, consigned Loss
Slide 34: Appendix IV – Illustration of Fair Value Gain/Loss on Gold Loans
APPENDIX IV – ILLUSTRATION OF THE FAIR VALUE GAIN/LOSS ON GOLD LOANS Fair value loss on settled gold loan WHEN MATURED Loss as of the settlement of gold loan contracts Gold loan contract Gold price increase Loss in settled gold US$(80)/oz at US$2,500/oz to US$2,580/oz loan contracts Revaluation loss
Slide 35: Appendix V – Our Sustainability
APPENDIX V – OUR SUSTAINABILITY Sustainability goals to achieve on or before 2029 Craftsmanship People focused Responsible sourcing Resource efficiency & carbon reduction 2029 Goal 2029 Goal 2029 Goal 2029 Goal • Promote cross-generational craftsmanship, • Cultivate our caring culture that embraces
Slide 36: Appendix V – Reporting Principles and Recognitions
APPENDIX V – OUR SUSTAINABILITY Reporting principles and recognitions Reporting principles In additions to the Environmental, Social and Governance Reporting Guide of HKEX, our sustainability disclosure is also prepared with reference to the recommendations from: • Global Reporting Initiative Sustai
Slide 37: Appendix VI – FY2024 Return on Equity
APPENDIX VI – FY2024 RETURN ON EQUITY ROE Net profit Total equity 24.7% FY2023: 16.5% Net profit margin Assets turnover Equity multiplier Net profit Revenue Total assets Revenue Total assets Total equity 6.1% 1.2 times 3.3 times FY2023: 5.8% FY2023: 1.1 times FY2023: 2.6 times 36
Slide 38: Disclaimer
DISCLAIMER These materials have been prepared by Chow Tai Fook Jewellery Group Limited (the “Company”) solely for use at this presentation and are not for public dissemination. The slides and any other materials used in this presentation are the property of the Company and must be treated as such. T
Slide 39: Chow Tai Fook Jewellery Group
CHOW TAI FOOK JEWELLERY GROUP
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