Core Viewpoint - The gold price has experienced a historic drop, marking the largest single-day decline in 12 years, leading to a cooling in gold consumption, although some companies are showing signs of recovery in retail sales despite high gold prices [1][2][3]. Group 1: Gold Price Trends - On October 21, gold prices saw a significant drop, with London gold reported at $4,065 per ounce, reflecting a daily decline of 1.44% [1]. - Prior to the recent drop, gold prices had surged, with Shanghai Gold Exchange AU99.99 reaching a high of 900 yuan per gram [4]. Group 2: Company Performance - Six福集团 reported a retail sales growth of 18% year-on-year for Q3, with retail income increasing by 15% and same-store sales up by 10%, all maintaining double-digit growth [2][4]. - Despite the increase in same-store sales, the weight of gold products sold decreased, indicating a shift in consumer behavior [2][5]. Group 3: Consumer Behavior - Consumers are gradually adapting to high gold prices, as evidenced by a recovery in sales after an initial decline in September [4]. - The acceptance of priced gold products is increasing, with same-store sales growth of 67% for priced gold products, while sales of diamond products fell by 10% [5]. Group 4: Market Expansion and E-commerce - Six福集团 plans to open approximately 20 new stores in overseas markets this fiscal year, reflecting a strategic shift towards international expansion [6][7]. - E-commerce has become a significant growth area, with online sales in the mainland market increasing by 19%, driven by a 42% growth in priced jewelry [7].

Core Insights - The company reported a strong sales performance in Q2, continuing the growth momentum from the previous quarter, aided by a low base effect [1] - Retail sales value and revenue for Q2 FY2026 increased by 18% and 15% year-on-year, respectively, with the retail value of priced gold products rising by 4 percentage points to 16% [1] - Same-store sales improved to +10% in Q2, with gold product sales increasing by 6% and priced jewelry sales rising by 25% [1] Sales Performance - The international average gold price rose approximately 40% year-on-year, contributing to the sales performance [1] - Same-store sales for priced gold products surged by 67%, while diamond product sales saw a decline of 10% [1] - Retail value and revenue in Hong Kong, Macau, and overseas markets increased by 13%, with same-store sales improving to +11% [1] Market Segmentation - The mainland China market performed well, with retail value increasing by 20% and retail revenue rising by 23%, primarily driven by e-commerce [1] - Overall same-store sales for gold products and priced products were +6% and +25%, respectively, with priced gold products showing a significant increase of 67% [1] Store Expansion - The company reduced its store count by 49 in Q2, while opening 8 overseas stores, marking its entry into the Vietnamese market [2] - In the first two weeks of October, same-store sales across all markets outperformed those in Q2 [2]

Group 1 - The company reported a strong retail performance in Q2, with overall retail sales increasing by 18% and retail revenue rising by 15% year-on-year, benefiting from a low base effect [1] - Same-store sales improved to +10%, with gold product sales increasing by 6% and jewelry product sales rising by 25%, particularly driven by a 67% increase in same-store sales of gold products [1] - Retail values and revenues in Hong Kong, Macau, and overseas markets rose by 13%, with same-store sales improving to +11%, while the mainland China market saw retail value growth of 20% and revenue growth of 23%, mainly driven by e-commerce [1] Group 2 - The company closed 49 stores in Q2 but opened 8 new overseas stores, marking its entry into the Vietnamese market [2] - In the first two weeks of October, same-store sales across all markets exceeded those of Q2 [2]

Core Insights - The company reported a strong performance in Q2, with overall retail value, retail revenue, and same-store sales increasing by 18%, 15%, and 10% respectively compared to Q1 [1] - The retail value and revenue in Hong Kong, Macau, and overseas markets rose by 13%, while same-store sales improved to a double-digit growth of +11% [1] - The mainland China market showed significant growth, with retail value increasing by 20% and retail revenue by 23%, primarily driven by e-commerce [1] - The company opened 8 overseas stores, marking its first entry into the Vietnamese market [1] Retail Performance - Same-store sales improved to +10% in Q2, with gold product sales increasing by +6% and pricing jewelry products seeing a +25% increase [2] - The same-store sales for priced gold products surged by 67%, while diamond product sales experienced a decline of -10% [2] Store Network - As of September 30, 2025, the company had a total of 3,113 stores globally, with a net decrease of 49 stores in Q2 [3] - The company operates 159 self-owned "Luk Fook Jewelry" stores, distributed across mainland China, Hong Kong, Macau, and overseas [3] - In total, the company has 2,634 "Luk Fook Jewelry" stores worldwide, including 2,458 brand stores in mainland China and 17 overseas [3]

Financial Data and Key Metrics Changes - Revenue reached HKD 13.3 billion, a 12.9% decrease compared to the same period last year, primarily due to a decline in sales of gold products caused by high gold prices [6] - The group's profit for the year decreased by 39.3% to HKD 1 billion, with basic earnings per share decreasing by 37.9% to HKD 1.87 [6][7] - Total operating expenses increased by 13.7% to around HKD 2.6 billion, leading to an increase in the ratio of total operating expenses to revenue by 4.6 percentage points to 19.6% [8][27] - The group's NAV per share was HKD 22.38, a 2.2% increase from the same period last year [11] Business Line Data and Key Metrics Changes - Retailing revenue decreased by 13.5% to HKD 11.1 billion, accounting for 82.7% of the group's total revenue, with segment profit decreasing by 17.7% to HKD 1 billion [14] - Licensing income decreased by 12.6% to HKD 904 million, accounting for 6.8% of the group's total revenue [16] - Wholesaling revenue declined by 8.8% to HKD 1.4 billion, accounting for 10.5% of the group's total revenue, with segment profit decreasing to HKD 14 million [15] Market Data and Key Metrics Changes - Revenue from Hong Kong, Macau, and overseas markets decreased by 19.6% to HKD 8.07 billion, accounting for 60.5% of the group's revenue [11] - Revenue from the Mainland market decreased by 0.2% to RMB 5.3 billion, accounting for 59.5% of the group's total revenue, with segment profit decreasing by 40.7% to HKD 577 million [12] - Retailing revenue in Mainland increased by 10.4% to HKD 3.1 billion, accounting for 59.9% of Mainland market's total [21] Company Strategy and Development Direction - The group has set a new three-year corporate strategy focusing on overseas market expansion, market-oriented products, and operational efficiency enhancements [29] - Plans to enter three more countries and establish 50 new overseas shops within the next three years [29] - The group aims to net 50 shops in the Mainland market and approximately 20 shops in overseas markets in financial year 2026 [31] Management's Comments on Operating Environment and Future Outlook - Management remains cautiously optimistic about medium to long-term business prospects in the Mainland and expects improvement in the Hong Kong market [30][52] - The group anticipates a rebound in sales performance in the Mainland market due to new product launches and effective marketing strategies [48][52] - Management noted that the high gold prices have affected consumer sentiment but expect sales of gold products to normalize as consumers adapt [41][42] Other Important Information - The average international gold price increased nearly 30% year on year, impacting sales of gold and platinum products [17] - The group has integrated ESG principles into its corporate planning and received 40 awards in FY '25 [40] Q&A Session Summary Question: Can you elaborate on the recovery in sales momentum for Mainland China? - Management noted strong performance in fixed price gold jewelry products due to new collections and effective promotions, with a new ambassador contributing positively [48][49][51] Question: What is the ASP trend for fixed price gold products? - The contribution of fixed price gold products to overall retailing revenue increased from 33% to 54%, with expectations for continued growth [56][66] Question: What is the guidance for same store sales growth and profitability? - Management expects double-digit growth for same store sales across all regions in FY 2026, with a stable gold hedging ratio maintained around 20% to 27% [61][62]