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Chow Tai Fook H1 Revenue Grows To $3.8B On Improved Consumer Sentiment

Chow Tai Fook Jewellery Group Executive Director, Strategic
Investment, Adrian Cheng (centre), Managing Director, Kent
Wong (left) and Executive Director, Finance and Operations,
Hamilton Cheng (right) announce the interim results.

Hong Kong listed jewellery retailer Chow Tai Fook Jewellery Group Limited, which has a large retail footprint in mainland China, reported revenue of HK$29.7 billion (US$3.8 billion) for the first half of fiscal 2019 (the six months ended September 30), a 20 percent increase over the HK$24.8 billion (US$3.2 billion) recorded in the same period last year.

Gross profit amounted to HK$8.5 billion (US$1.1 billion) as against the HK$7.17 billion (916 million) recorded in the same period last year. Core operating profit surged by 24.7 percent in a year-on-year comparison. Core operating profit margin increased slightly to 10.1 percent.

The company attributed the improved performance to stabilising consumer demand and reviving visitor traffic from mainland China, which fuelled the jewellery market.

According to the company, the jewellery retail landscape exhibited positive momentum in greater China during the period, thanks to steady economic recovery and improving consumer sentiment. The group’s operations in Hong Kong and Macau grew robustly during the period due to reviving local consumer consumption demand and recovering tourism from Mainland China. Same store sales growth of Hong Kong and Macau accelerated to 24.4 percent during the period, bolstered by both vibrant average selling price and volume growth. In mainland China, same store sales rose by 4.9 percent, primarily driven by an increase of the average selling price.

The group opened a net of 237 points of sale during the period, bringing the total number to 2,822 as at September 30. Breaking up the total, the company said that in mainland China, in an initiative to gauge market potential in lower tier cities and shopping malls, net openings amounted to 233 points of sale, reaching 2,682 while the retail network footprint remained stable at 99 points of sale in Hong Kong and Macau. During the period, the group also opened 4 points of sale in other markets including Korea, Japan, Malaysia and Singapore. 

Group Chairman Henry Cheng remarked, “Growing in a time of change, the group has always poised to inject vitality in people, products and operations through our persistent investment in innovation and technology that allows us to formulate and execute a winning customer experience strategy. At all events, we remain optimistic about the mid-to longterm prospects of the jewellery market, on the back of the continuing changes undergoing in Mainland China.”

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