Xin Lang Cai Jing·2025-06-19 13:57Core Viewpoint - Chow Tai Fook's FY25 performance exceeded expectations due to effective strategic adjustments, with a gradual recovery anticipated in the industry, highlighting the value of leading companies [2][4]. Financial Performance - FY25 revenue was HKD 89.66 billion, down 17.5% year-on-year, with a decline of 18.4% in the first half and 15.1% in the second half [2]. - The net profit attributable to shareholders was HKD 5.92 billion, a decrease of 9.0% year-on-year, with the first half down 44.4% and the second half up 73.8% [3]. - The company declared a dividend of HKD 0.52 per share, with a payout ratio of 87.8% [2]. Revenue Breakdown - Revenue by region showed declines: Mainland direct sales down 18.2%, franchise sales down 15.0%, and Hong Kong/Macau down 20.6% [2]. - The number of stores in Mainland China decreased by 896 to 6,274, with same-store sales down 19.4% for direct stores and 13.9% for franchises [2]. Product Performance - Revenue from gold by weight decreased by 29.4%, while revenue from priced gold increased by 105.5%, and jewelry embedding revenue fell by 13.8% [2]. - Priced gold products accounted for 18.1% of gold product revenue, with significant sales from the Heritage and Palace Museum series exceeding HKD 4 billion each [2]. Margin and Profitability - Gross margin improved to 29.5%, up 5.5 percentage points year-on-year, benefiting from rising gold prices and product transformation strategies [3]. - Operating profit margin was 16.4%, an increase of 4.1 percentage points year-on-year [3]. Market Trends - Since April 2024, gold prices have been rising, with consumer confidence in gold's long-term value increasing due to international conflicts [3]. - The retail performance in April and May 2025 showed a slight decline of 1.7% year-on-year, with Mainland China down 2.9% and Hong Kong/Macau up 6.3% [3]. Management Guidance - Management is cautiously optimistic, projecting mid-single-digit growth for same-store sales in FY26 for both Mainland and Hong Kong/Macau [4]. - Expected gross margin decline of 0.8-1.2 percentage points due to last year's gold price benefits, but a steady increase is anticipated when excluding gold price impacts [4]. Strategic Outlook - The company is focused on brand and product-driven growth, with plans to open 20 new image stores and launch a high-end jewelry series [4]. - Projected net profits for FY26 and FY27 are HKD 8.39 billion and HKD 9.28 billion, representing year-on-year growth of 42% and 11% respectively [4].