Key Takeaways:
Chow Tai Fook Jewellery Group reported a 52% jump in annual net profit to HK$9 billion, driven by higher gold prices and a brand overhaul.
"We are confident to deliver sustainable and meaningful growth in same-store and top-line growth in the next three years," management said in an analyst presentation.
Revenue for the year ended March rose 5.3% to HK$94.4 billion. Second-half revenue accelerated to 10% year-over-year growth from the first half. Mainland China revenue rose 5% to HK$43.8 billion, while Hong Kong, Macau and overseas markets surged 33% to HK$11.6 billion. The company declared a final dividend of HK$0.45 per share, representing a 73% payout ratio and a dividend yield of about 7%.
Shares surged as much as 19% to HK$13.18, their biggest single-day gain since the company's 2011 listing. The rally came as April-May same-store sales in mainland China rose 20% for directly operated stores and 15% for franchised stores, while Hong Kong and Macau recorded a 41% increase — all exceeding market expectations.
The company net closed 358 Chow Tai Fook specialty retail outlets in mainland China during the year, but average monthly sales per new store at year-end jumped 57% year-over-year to about HK$1.6 million, signaling the brand transformation is gaining traction.
CICC raised its earnings per share forecasts for fiscal 2027 and 2028 by 11% and 10% to HK$1.1 each, citing solid sales performance. The broker maintained its Outperform rating and HK$15.86 price target, equivalent to 15 times forward earnings. Citi analysts led by Tiffany Feng raised fiscal 2027-2028 net profit forecasts by 8% to 9% but trimmed the target price to HK$15.40 from HK$16.70 on softer market sentiment.
Management guided for mid- to high-single-digit revenue growth in fiscal 2027 with an operating margin of about 14%. Income from gold lending is expected to reach between HK$500 million and HK$800 million.
The guidance raise signals management expects its focus on higher-margin luxury and self-operated store formats to sustain momentum. Investors will watch monthly same-store sales data in coming quarters for confirmation that the brand transformation is delivering above-market growth through fiscal 2030.
This article is for informational purposes only and does not constitute investment advice.
