DJ EQS-News: Chow Tai Fook Jewellery Group Announces FY2021 Interim Results and The Unaudited Key Operational Data from 1 October to 18 November 2020
EQS-News / 24/11/2020 / 16:57 UTC+8
FOR IMMEDIATE RELEASE
Chow Tai Fook Jewellery Group Announces FY2021 Interim Results and
The Unaudited Key Operational Data from 1 October to 18 November 2020
Financial Highlights
2020 2019 YoY Change
HK$ million HK$ million
For the six months ended 30
September
Revenue 24,673 29,533 -16.5%
Gross profit 8,143 8,147 0.0%
Gross profit margin 33.0% 27.6%
Adjusted gross profit margin 35.1% 30.7%
(1)
Core operating profit (2) 4,078 3,527 +15.6%
Core operating profit margin 16.5% 11.9%
(2)
Profit before taxation 3,284 2,200 +49.3%
Profit attributable to 2,232 1,533 +45.6%
shareholders of the Company
Earnings per share - Basic 0.22 0.15 +45.6%
(HK$)
Interim dividend per share(3) 0.16 0.12 N/A
(HK$)
(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 adjusted gross
profit and other income, less selling and distribution costs
and general and administrative expenses ("SG&A"), 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 dividend payout ratio for 1HFY2021 is approximately
71.7%
(Hong Kong, 24 November 2020) 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 over 90 years of heritage, today
announces its interim results for the six months ended 30 September 2020
("1HFY2021").
The Group's revenue declined by 16.5% to HK$24,673 million in 1HFY2021
(1HFY2020: HK$29,533 million). Gross profit remained stable at HK$8,143
million (1HFY2020: HK$8,147 million). Adjusted gross profit margin was lifted
to 35.1% in 1HFY2021, thanks to the improvement in like-for-like gross profit
margin of gold products resulted from the surge of international gold price.
Core operating profit benefitted from the adjusted gross profit margin
improvement with core operating profit margin widened to 16.5% in 1HFY2021.
The Group's profit before taxation increased by 49.3% to HK$3,284 million
(1HFY2020: HK$2,200 million).
Profit attributable to shareholders of the Company increased by 45.6% to
HK$2,232 million (1HFY2020: HK$1,533 million) mainly benefitted from our
like-for-like gross profit margin improvement, one-off government subsidies
and rent concession, plus foreign exchange gain, netting off impairment on
assets. Basic earnings per share were reported at HK$0.22 (1HFY2020: HK$0.15).
The Board has declared an interim dividend of HK$0.16 per share. The payout
ratio approximates 71.7% in 1HFY2021.
Business Review
While business in Mainland China witnessed a steady recovery on the back of
the easing COVID-19 situation in 2QFY2021, performance in Hong Kong, Macau and
other markets remained lackluster. Thus, Same Store Sales ("SSS") in Mainland
China stayed flat in 1HFY2021 supported by a positive Same Store Sales Growth
("SSSG") in 2QFY2021 as business activities and consumer sentiment revived. In
Hong Kong and Macau, SSS was down by 65.7% during the period as customer
traffic remained stagnant.
The Group's retail network expanded to 4,153 POS, with a net addition of 303
POS as at 30 September 2020. During the period, we continued our expansion
strategy in Mainland China and opened a net of 286 CHOW TAI FOOK JEWELLERY POS
in franchised format, among which approximately 51% were located in Tier III,
IV and other cities. Retail Sales Value ("RSV") growth in Tier III, IV and
other cities outpaced Tier I and II cities during the period, largely
attributable to the new openings. While in Hong Kong and Macau, the Group had
a net closing of 5 POS in touristic areas. A net of 2 POS in other markets
were closed as their business operations were also affected by the pandemic.
To meet today's ever-changing customer expectations, our differentiation
strategy continues to make inroads into diverse customer segments. During
1HFY2021, CTF * HUÁ Collection received buoyant demand. Its contribution to
our gold jewellery and products RSV in Mainland China further expanded to
35.6% during the period.
T MARK, the Group's diamond ingredient brand recorded a RSV growth of 29.1%
year-on-year in Mainland China while a drop of 57.9% in Hong Kong and Macau
during the period. T MARK products accounted for 22.3% and 27.1% of the
diamond products RSV in Mainland China and Hong Kong and Macau, respectively.
An AI Diamond Grading Certificate powered by artificial intelligence ("AI")
and blockchain technology will be first available for the diamonds (0.30 carat
or below) of T MARK in the Hong Kong market in the first half of 2021. The
Certificate offers a highly consistent and truthful diamond grading standard
plus an extra natural diamond quality assurance to customers.
During the period, we kept on exploring and improving our e-commerce business
and online-to-offline ("O2O") retailing. Our e-commerce included major
platforms such as Chow Tai Fook eShop, Tmall, JD.com, Vipshop, while our O2O
related business covered O2O distribution (i.e. routing online orders to POS
for delivery service), CloudSales 365 and Cloud Kiosk. RSV of the Group's
e-commerce and O2O related business in Mainland China surged by 21.8% in
1HFY2021, contributing to 5.6% of RSV and 14.3% of retail sales volume in
Mainland China.
In 1HFY2021, we used CloudSales 365 to cultivate our own private domain and
the performance was outstanding. Through this tool, we have reached over two
million customers, of which approximately 50% who made a purchase through the
tool were new customers. We also noticed that average selling price and sales
conversion rate sold through the tool were generally higher than those from
e-commerce platforms. Cloud Kiosk allowed customers to enjoy a shorter
transaction time and wider product selection. There were over 1,000 spots,
primarily at our POS in Mainland China as of 30 September 2020.
Prospects and Strategies
Chow Tai Fook Jewellery Group Chairman Dr. Henry Cheng remarked, "Despite the
challenges posed by the evolving situation of COVID-19 and uncertainties in
the global economy, the Group pressed ahead during 1HFY2021. The Group will
continue to adapt to the ever-changing business environment, allowing us to
mitigate risks and overcome challenges through innovations."
With a solid foundation that has already been built through our "Smart+ 2020"
strategic framework, we are pleased to move forward with our Dual Force
Strategy. On one hand, we continue to expand our footprint in an agile way. On
the other hand, we focus on digital empowerment in order to deliver
exceptional customer experience that creates long-term brand differentiation
and loyalty.
We believe that our Dual Force Strategy will guide us in successfully
navigating challenges ahead and enable our customers to experience a blissful
fulfillment through jewellery. We are also delighted to report that we are
steadily moving towards our four long-term goals, namely, (1) to strengthen
our market leader as we seek further market penetration; (2) to develop a
comprehensive jewellery ecosystem; (3) to be a tech-savvy jewellery company by
harnessing innovation and technology; and (4) to improve operational
efficiency through digital transformation.
The Unaudited Key Operational Data from 1 October to 18 November 2020
From 1 October up to 18 November 2020, the year-on-year changes of RSV and SSS
are as follows:
(% change compared to the same
period last year)
Group
RSV growth +17.7%
Mainland China Hong Kong, Macau
and other markets
RSV growth +25.7% -11.1%
Contribution to Group RSV 83.6% 16.4%
Mainland China Hong Kong and Macau
SSSG +12.0% -24.3%
SSS volume growth -10.7% -28.1%
SSSG by product
-6.2% +39.1%
· Gem-set / Platinum /
K-gold jewellery
+13.3% -49.5%
· Gold jewellery and
products
Remark: The unaudited key operational data from 1 October 2020 to 18 November
2020 was prepared based on the latest available management accounts and the
information currently available to the Group. The position remains to be
reviewed by the Company's auditor, its audit committee and the Board.
- End -
Chow Tai Fook Jewellery Group Limited
Chow Tai Fook Jewellery Group Limited (the "Group"; SEHK stock code: 1929) was
listed on the Main Board of The Stock Exchange of Hong Kong in December 2011.
(MORE TO FOLLOW) Dow Jones Newswires
November 24, 2020 03:57 ET (08:57 GMT)
DJ EQS-News: Chow Tai Fook Jewellery Group Announces -2-
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 differentiation strategy continues to make inroads into diverse
customer segments by catering to a bespoke experience for different lifestyles
and personalities, as well as customers' different life stages. Offering a
wide variety of products, services and channels, the Group's brand portfolio
comprises the CHOW TAI FOOK flagship brand with curated retail experiences,
and other individual brands including HEARTS ON FIRE, ENZO, SOINLOVE and
MONOLOGUE.
The Group's commitment to sustainable growth is anchored in its
customer-centric focus and strategies, which are in place to promote long-term
innovation in 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 Haide Ng
Director, Investor Senior Manager, Investor Manager, Investor
Relations and Relations and Corporate Relations and Corporate
Communications Communications
Corporate Communications
Tel: (852) 2138 8501 Tel: (852) 2138 8337 Tel: (852) 2138 8336
Email: Email: Email:
danitaon@chowtaifook.com peonysze@chowtaifook.com haideng@chowtaifook.com
File: Chow Tai Fook Jewellery Group Announces FY2021 Interim Results and The
Unaudited Key Operational Data from 1 October to 18 November 2020 [1]
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November 24, 2020 03:57 ET (08:57 GMT)
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