Mei Ri Jing Ji Xin Wen·2025-11-26 16:00Core Viewpoint - The performance of Chow Tai Fook Jewelry Group has been under pressure due to fluctuations in the international gold market, with a notable decline in revenue and store count, prompting the company to adapt its strategies to maintain market share and profitability [1][3]. Financial Performance - For the first half of the fiscal year 2026, Chow Tai Fook reported a revenue of HK$ 38.986 billion, a year-on-year decrease of 1.1%, marking the lowest level in five years [1][4]. - The net profit attributable to shareholders remained stable at HK$ 2.534 billion, with earnings per share at HK$ 0.26 [4]. - The overall gross profit margin for the period was 30.5%, down 0.9 percentage points year-on-year, with a notable decline in the mainland China business gross margin [4][5]. Market Trends - The high gold prices are driving consumers towards lighter and smaller products, with small-weight gold products (under 10 grams) accounting for 45% of total gold jewelry sales in the first half of 2025, an increase of 8 percentage points from 2023 [5]. - The implementation of a new value-added tax policy starting November 2025 is expected to push manufacturers and retailers to focus on developing high-value products, which typically have better margins [5]. Store Operations - Chow Tai Fook's store count in mainland China decreased by 606 to 5,895, returning to 2022 levels, while the company opened 57 new retail points during the same period [6]. - The company is focusing on optimizing its channel structure and enhancing the shopping experience through new store formats and high-end locations [6]. Online Business Growth - The online retail value in mainland China increased by 27.6%, accounting for 7.1% of total retail value, with significant growth in the official online store and Douyin platform [7]. - Despite the rapid growth in online sales, the overall scale remains relatively limited, and the sustainability of this growth amidst high competition and costs is yet to be validated [7].