2023-11-29 22:32Financial Performance - Revenue for the first half of FY2024 increased by 6.4% year-on-year to HK$49,526 million, with a growth of 11.3% on a constant exchange rate basis[12]. - Core operating profit rose by 37.7% to HK$5,989 million, exceeding revenue growth, driven by optimized pricing strategies and operational efficiency[12]. - Profit attributable to shareholders increased to HK$4,551 million, a rise of 36.4% compared to HK$3,336 million in 2022[24]. - Earnings per share rose to HK$0.46, reflecting a 39.4% increase from HK$0.33 in 2022[24]. - Revenue for the six months ended September 30, 2023, was HK$49,526 million, representing a 6.4% increase from HK$46,535 million in 2022[24]. - Core operating profit for the same period was HK$5,989 million, up 37.8% from HK$4,349 million in 2022[24]. - The Group's profit attributable to shareholders increased by 36.4%, primarily due to the surge in gold prices and effective pricing strategy optimization[111]. - The Group's major operating profit increased by 37.7% year-on-year to HK$5,989 million, with a corresponding profit margin of 12.1%[112]. Profitability Metrics - Adjusted gross profit margin improved by 140 basis points year-on-year to 23.8%, while core operating profit margin expanded by 280 basis points to 12.1%[12]. - Gross profit margin for the period was 24.9%, slightly up from 23.6% in 2022[24]. - SG&A expenses decreased by 4.5% to HK$6,150 million, with the SG&A ratio improving by 140 basis points to 12.4%[125]. - The SG&A to revenue ratio significantly decreased by 730 basis points to 16.4%, with fixed costs accounting for approximately 65% of SG&A expenses[178]. - The SG&A ratio improved by 100 basis points to 11.5% for the period ended September 30, 2023[138]. Market Performance - Revenue in Hong Kong, Macau, and other markets surged by 57.7% during the period due to improved inbound tourism[12]. - Same-store sales growth (SSSG) in Hong Kong and Macau reached 59.6%, driven by both average selling price and volume increases[104]. - Retail sales value (RSV) in Hong Kong, Macau, and other markets surged by 58.5% during 1HFY2024, with average daily customer traffic increasing by 51.1% year-on-year[74][76]. - The number of retail points in Mainland China increased to 7,699, while Hong Kong saw a slight decrease to 67[27]. - Retail sales volume in Mainland China reached 10,724,000 units, while Hong Kong and Macau recorded 925,000 units sold[27]. Strategic Initiatives - The company is focusing on five strategic priorities: brand revamp, product optimisation, accelerated digitalisation, operational efficiency, and talent cultivation to enhance competitiveness[29]. - The brand revamp is progressing with the launch of new designs for the HUÁ Collection and the first-ever 360-degree global marketing campaign in 1HFY2024[12]. - A centralized marketing strategy was implemented in 1HFY2024 to promote consistent brand recognition and maximize the impact of global marketing efforts[49]. - The Group is focused on nurturing a people-first workplace culture and strengthening talent development as part of its strategic growth roadmap[45]. - The Group aims to enhance earnings quality and returns to equity and capital while focusing on five strategic priorities for sustainable growth[42]. Inventory and Cash Flow Management - Net cash from operating activities was HK$7,919 million, significantly higher than the negative cash flow of HK$905 million in 2022[26]. - Inventory turnover period was 312 days, consistent with the previous year, indicating stable inventory management[25]. - The company is managing cash flows and capital expenditure prudently due to a higher cost of capital, leading to a selective approach to new store openings[65]. E-commerce and Retail Trends - E-commerce contributed 4.6% to the RSV and about 11% in volume during the first half of FY2024[66]. - The average selling price (ASP) of gold jewellery and products increased to approximately HK$5,600 in 1HFY2024, up from HK$5,200 in 1HFY2023[134]. - The ASP of gem-set jewellery rose to about HK$8,100 in 1HFY2024, compared to HK$7,100 in 1HFY2023[134]. - Brick and mortar stores accounted for approximately 95% of the retail sales value (RSV) in the Mainland during 1HFY2024[157]. Cultural and Social Impact - The company is committed to preserving Chinese cultural heritage through partnerships with academic institutions and the introduction of new product designs[36]. - A social impact strategy has been formulated focusing on promoting Chinese culture, talent development, and enhancing family wellbeing[37]. Economic Outlook - The Group expects FY2024 to be a year of gradual recovery, supported by government initiatives to boost domestic consumption in the Mainland and Hong Kong[81][83]. - China's economy is showing steady recovery, supported by government policies aimed at boosting consumer spending and urbanisation[31].