2021-11-30 03:21Revenue Growth - Revenue increased by 79.1% in 1HFY2022, reaching HK$44,186 million, driven by strong demand for gold jewellery and rapid retail network expansion in Mainland China[9] - Revenue for the six months ended 30 September 2021 was HK$ 44,186 million, a significant increase from HK$ 24,673 million in the same period last year, representing an increase of 79.0%[18] - Revenue increased by 79.1% to HK$44,186 million during the first six months of FY2022[23] - Revenue from Mainland China surged by 81.7%, contributing 87.2% to the Group's total revenue during the period[76] - Revenue in Hong Kong, Macau, and other markets rose by 63.0% year-on-year, primarily due to improving local consumer spending[76] Profitability - Gross profit rose by 32.6% to HK$10,794 million, while adjusted gross profit margin declined by 1,160 basis points to 23.5% due to a tough comparison base from the previous year[9] - Core operating profit increased by 9.6% year-on-year, maintaining a core operating profit margin of 10.1%[9] - Profit attributable to shareholders was HK$ 3,581 million, compared to HK$ 2,232 million in the previous year, marking an increase of 60.5%[18] - Profit attributable to shareholders rose by 60.4% to HK$3,581 million, with earnings per share at HK$0.36[23] - The Group's core operating profit increased by 9.6% year-on-year in 1HFY2022, despite a decline in adjusted gross profit margin by 1,116 basis points[72] Retail Network Expansion - Retail network expanded to 5,214 points of sale (POS) as of 30 September 2021, with a net addition of 623 POS during the period[9] - The number of retail points in Mainland China increased to 5,070, with a net movement of 625[17] - The total number of retail points in Mainland China expanded to 5,078[21] - In 1HFY2022, Chow Tai Fook opened a net of 624 retail points in Mainland China, with over 50% located in Tier III, IV, and other cities[130] - Chow Tai Fook continues to expand its retail network in Tier I and Tier II cities, leveraging franchisees' local resources to penetrate lower-tier cities[49] Same-Store Sales Growth - Same-store sales growth (SSSG) in Mainland China was 32.2% for the first half of FY2022[17] - Same-store sales growth (SSSG) in Hong Kong & Macau was 79.8%[21] - Same-store sales growth (SSSG) for gold jewellery and products climbed to 129.6% in 1HFY2022, with ASP rising from HK$5,800 to HK$6,300[146] - Same-store sales growth (SSSG) for gem-set, platinum, and k-gold jewellery was 37.2% during the period, while the average selling price (ASP) of gem-set jewellery increased by 3.8%[147] - Same-store sales growth (SSSG) in Mainland China reached 32.2%[21] E-commerce and Digital Transformation - E-commerce and smart retail applications contributed 4.9% and 4.1% respectively to the Mainland's retail sales value (RSV), totaling a contribution of 9.0%[9] - Online exclusive products accounted for approximately 57% of the retail sales value on e-commerce platforms, up from about 42% in the corresponding period last year[49] - The average selling price of products purchased through CloudSales 365 was 1.8 times higher than that of public domain e-commerce platforms[50] - The Group is focusing on exploring new online channels and optimizing smart retail applications to enhance customer experience[35] - The Group's smart retail business in Mainland China registered encouraging growth, supported by rapid retail network expansion with 624 new openings[71] Financial Position and Liquidity - Net gearing ratio stood at 43.7% as of 30 September 2021[16] - Current assets increased to HK$ 70,220 million, while current liabilities rose to HK$ 43,360 million, resulting in net current assets of HK$ 26,860 million[19] - The Group maintained high liquidity to meet operating cash flow requirements and avoided engaging in highly leveraged or speculative derivative products[180] - The Group's daily operations were primarily financed by operating cash flows, with reliance on short-term borrowings for inventory financing during peak seasons[179] - The Group's net increase in bank borrowings was HK$1,204 million for the six months ended September 30, 2021[188] Strategic Initiatives - The Group deepened the reach of the CTF • HUÁ Collection by expanding product offerings and exploring new collaborations[9] - The Dual-Force Strategy aims to tap into the consumption demand in lower-tier cities[25] - The company plans to accelerate smart retail and smart manufacturing transformation to enhance omni-channel retail capabilities[28] - The company is actively enhancing smart manufacturing capabilities and promoting digitalisation to support business growth[35] - The Group plans to continue retail expansion in Mainland China, focusing on lower-tier cities and leveraging franchise partners[66] Market Trends and Challenges - The retail market in Mainland China may experience decelerated growth in 2HFY2022 due to pandemic impacts and a high base effect[42] - The overall GDP of China recorded a 4.9% year-on-year increase for the third quarter of 2021, with a 9.8% year-on-year increase for the first nine months of 2021[41] - The company anticipates a deceleration in business growth in 2HFY2022 due to a relatively high base in the retail market[65] - The fluctuation of RMB impacted the Group's financial performance, with exchange differences recognized in the translation reserve in equity[184] - The company did not utilize any hedging instruments against RMB fluctuations due to the lack of significant currency risk[182]