EQS-News / 06/06/2019 / 21:50 UTC+8
*FOR IMMEDIATE RELEASE *
*Chow Tai Fook Jewellery Group Announces Remarkable FY2019 Annual Results*
_Solid Revenue Growth Fuelled by POS Openings and Strong Performance of Gold
Products_
*Financial Highlights*
*For the year ended 31 *2019* 2018 YoY
March* *(HK$ million)* (HK$ million) change
*Revenue* *66,661* 59,156 +12.7%
*Gross profit* *18,602* 16,213 +14.7%
_Gross profit margin_ *27.9%* 27.4%
_Adjusted gross profit *27.9%* 27.2%
margin(1)_
*Core operating *6,972* 5,606 +24.4%
profit*_(2)_
_Core operating profit *10.5%* 9.5%
margin(2)_
*Profit attributable to *4,577* 4,095 +11.8%
shareholders of the
Company*
*Earnings per share - Basic *0.46* 0.41 +11.8%
(HK$)*
*Dividend per share*_(3)_ *0.65* 0.57
*(HK$)*
_Full year dividend (HK$)_ *0.35* 0.27
_Special dividend (HK$)_ *0.30* 0.30
_(1)_ _Adjusted gross profit margin, a non-IFRS measure,
eliminates the effect of unrealised loss (gain) on gold
loans, which the Company believes is useful in gaining a
more complete understanding of its operational performance
and the underlying trend of its businesses_
_(2)_ _Core operating profit and the corresponding margin, a
non-IFRS measure, being the aggregate of gross profit and
other income, less selling and distribution costs and
general and administrative expenses and unrealised
loss(gain) on gold loans, which the Company believes is
useful in gaining a more complete understanding of its
operational performance and the underlying trend of its
core businesses_
_(3)_ _The proposed final and special dividends of HK$0.20 and
HK$0.30 per share are subject to the approval of
shareholders at the forthcoming annual general meeting.
Dividend payout ratio for FY2019, excluding special
dividend, is approximately 76.5% on a full year basis_
(Hong Kong, 6 June 2019) *Chow Tai Fook Jewellery Group Limited* ("Chow Tai
Fook Jewellery Group", "the Group" or "the Company"; SEHK stock code: 1929), a
Hong Kong Main Board listed company with 90 years of heritage, today announces
its annual results for the year ended 31 March 2019 ("FY2019").
The Group recorded a revenue of HK$66,661 million for FY2019 (FY2018:
HK$59,156 million), representing a year-on-year increase of 12.7%. Gross
profit amounted to HK$18,602 million (FY2018: HK$16,213 million). Adjusted
gross profit margin was up by 70 bps to 27.9% in FY2019. Core operating profit
surged by 24.4% to HK$6,972 million (FY2018: HK$5,606 million), thanks to an
increase in adjusted gross profit margin and the benefit of operating
leverage. Core operating profit margin improved by 100 bps to 10.5%.
Profit attributable to shareholders of the Company rose 11.8% to HK$4,577
million (FY2018: HK$4,095 million). Basic earnings per share were reported at
HK$0.46 (FY2018: HK$0.41). The Board has proposed a final dividend of HK$0.20
per share and a special dividend of HK$0.30 per share. Dividend per share for
the year amounted to HK$0.65. Excluding special dividend, payout ratio
approximates 76.5% in FY2019.
*Business Review*
FY2019 marked another year of growth for the Group's business. All product
categories exhibited positive growth in FY2019, among which gold products
demonstrated a relatively stronger performance. Revenue contribution of gold
products increased by 170 bps to 61.1%. The recovery track of Same Store Sales
Growth ("SSSG") in both Mainland China and Hong Kong and Macau, commenced
since 2HFY2017, extended into 1HFY2019. Yet, a weaker performance amongst both
markets was seen during 2HFY2019 against volatile macro backdrop. SSSG in
Mainland China was 3.4% in FY2019, thanks to an uplift in Average Selling
Price ("ASP") supported by an increase in the average weight per gold product
sold and the success of CTF * HUÁ Collection. Backed by both ASP and volume
growth, Hong Kong and Macau delivered a SSSG of 8.7% during the financial
year.
The Group's POS amounted to 3,134 as at 31 March 2019. In FY2019, net openings
in Mainland China reached 539 POS in which a majority was franchised, echoing
the Group's effort to deepen the penetration into the lower tier cities. CHOW
TAI FOOK JEWELLERY POS, which contributed approximately 90% of the Retail
Sales Value ("RSV") in Mainland China, reached 2,803 POS as at 31 March 2019
with net openings of 486 POS during FY2019. In Hong Kong and Macau, retail
network of CHOW TAI FOOK JEWELLERY was stable at 99 POS. The first T MARK
specialty store, HEARTS ON FIRE POS and ARTRIUM showroom were opened in Hong
Kong during FY2019. The Group also opened a net of 8 POS in other markets
including its first store in Cambodia and Vietnam, respectively.
The Group's multi-brand strategy has been making good progress over the past
few years. Across the Group's established CHOW TAI FOOK JEWELLERY retail
network, selective POS were rolled out and upgraded to JEWELRIA and ARTRIUM,
targeting sophisticated customers seeking international luxury jewellery
selections and unique experiences. Experience shops with thematic layouts were
also opened in selective locations in Mainland China following the success of
those in Hong Kong last year. Each experience shop is infused with its
respective local culture to create a unique blend for each market.
T MARK, the Group's proprietary diamond brand with a unique traceability
feature, penetrates quickly in Mainland China primarily in the form of
counter-in-shop ("CIS"). As at 31 March 2019, there were 500 CIS in Mainland
China and 43 CIS in Hong Kong and Macau distributing T MARK diamond products.
Five specialty stores were also opened during the financial year. In FY2019, T
MARK recorded an impressive RSV growth of 75.8% in Mainland China and 72.8% in
Hong Kong and Macau. Sales of T MARK products accounted for 19.4% and 25.9% of
the RSV of our diamond products in Mainland China and Hong Kong and Macau,
respectively.
HEARTS ON FIRE, a premium diamond brand with delicate cutting and polishing
skills, is also rolled out in relatively mature markets in the form of SIS and
CIS, leveraging the strength of the Group's existing network. There were 18
POS, 186 shop-in-shop ("SIS") and CIS as at 31 March 2019.
SOINLOVE and MONOLOGUE were successfully marketed to younger customers through
revolving interactions between online and offline platforms. Targeting to be a
top of mind jewellery gifting product of millennial women, SOINLOVE opened 18
POS in FY2019, bringing the total number of POS to 27 as at 31 March 2019.
MONOLOGUE, a stylish fashion jewellery brand for young generation, opened a
net of 27 POS during the year, resulting in a total of 38 POS.
E-commerce business recorded a RSV growth of 13.2% in FY2019, contributing to
4.8% of RSV and 13.6% of retail sales volume in Mainland China. Average daily
online traffic reached 487,000 unique visitors. The number of followers on
official Sina Weibo, Tencent Weibo and WeChat accounts also increased to
approximately 7 million.
As at 31 March 2019, there were 2,200,000 members in Mainland China, with a
repeat purchase of 22.2%. In Hong Kong and Macau, the number of members
reached 1,050,000 and the repeat purchase ratio increased to 34.5%.
*Business Outlook and Strategies*
In light of the macro headwinds and a tough comparison base as we head into
1HFY2020, the Group is cautiously optimistic for FY2020. The US-China trade
talks may take some time to settle in our view. 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.
Chow Tai Fook Jewellery Group Chairman Dr. Henry Cheng remarked, "This year
marks a significant moment for the Group, a time in history which we are proud
to have reached. Drawing on our passion for "Sincerity ** *Eternity", Chow Tai
Fook shaped the course of history with amazing innovations along the way."
The Group's "Smart+ 2020" three-year strategic framework, launched since
FY2018, serves as the backbone for its business development and
transformation. The Group would continue its efforts with focus on these four
key areas: (1) Implementing multi-brand strategy and enriching retail
experience to breakthrough customers' inherent expectations on jewellery
store; (2) Reinforcing customer experience with personalised engagement in the
manufacturing process through the customer-led C2M business model; (3)
Building up of effective operation models by deriving useful insights from big
data analytics; and (4) Incubating talents internally within the Group and
externally for the jewellery industry by promoting the innovative and
entrepreneurial culture and providing broader horizons to unleash their
creativity and talents.
_- End -_
*Chow Tai Fook Jewellery Group Limited *
Chow Tai Fook Jewellery Group Limited (the "Group"; SEHK stock code: 1929)
listed on the Main Board of The Stock Exchange of Hong Kong in December 2011.
The Group's vision is to become the most trusted jewellery group in the world.
Founded in 1929, the Group's iconic brand "CHOW TAI FOOK" is widely recognised
for its trustworthiness and authenticity, and is renowned for its product
design, quality and value. A long-standing commitment to innovation and
craftsmanship has contributed to the Group's success, along with that of its
iconic retail brand, and has been embodied in its rich 90 year heritage.
Underpinning this success are our long held core values of
"Sincerity?Eternity".
The Group's multi-brand strategy comprises the ARTRIUM, JEWELRIA and CTF WATCH
brands that are endorsed by the CHOW TAI FOOK master brand, in addition to
other brands including HEARTS ON FIRE, T MARK, SOINLOVE and MONOLOGUE.
The Group's commitment to sustainable growth is anchored in its "Smart+"
strategy, which is in place to promote long term innovation in the business,
in people and in culture. Another asset underpinning sustainable growth is a
sophisticated and agile business model. This supports the Group by fostering
excellence and extending opportunities along the entire value chain to
communities and industry partners across the world.
With an extensive retail network in Greater China, Japan, Korea, Southeast
Asia and the United States, and a fast-growing e-commerce business, the Group
is implementing effective online-to-offline ("O2O") strategies to succeed in
today's omni-channel retail environment.
______________________________________________________________________________
__
*Media Enquiries:*
*Chow Tai Fook Jewellery Group Limited *
Danita On Peony Sze
Director, Investor Relations and Senior Manager, Investor
Corporate Communications Relations and
Corporate Communications
Tel: (852) 2138 8501 Tel: (852) 2138 8337
Email: danitaon@chowtaifook.com Email: peonysze@chowtaifook.com
Picture: http://n.eqs.com/c/fncls.ssp?u=NQKOHJXUPY [1]
Subtitle: (From Left to Right) Chow Tai Fook Jewellery Group Executive
Director Chan Sai-Cheong, Executive Director Hamilton Cheng, Chairman Dr.
Henry Cheng, Executive Director Adrian Cheng, Managing Director Kent Wong and
Executive Director Peter Suen
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Document title: Chow Tai Fook Jewellery Group Announces Remarkable FY2019
Annual Results
06/06/2019 Dissemination of a Financial Press Release, transmitted by EQS
Group.
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(END) Dow Jones Newswires
June 06, 2019 09:51 ET (13:51 GMT)
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