Chow Tai Fook's profits down 36.6% to $374.29m

A surge in gold price and weaker Hong Kong sales dragged down revenues.

Chow Tai Fook Jewellery's profit attributable to shareholders crashed 36.6% YoY to $374.29m (HK$2.9b) in FY 2020, from $590.53m (HK$4.58b) in the previous year, according to a press release. Over the same period, revenue fell 14.9% to $7.32b (HK$56.75b).

The decline in revenue was mainly attributed to the COVID-19 epidemic, a surge in international gold price that dampened the retail demand for gold products, and weak performance in Hong Kong.

Because of this, core operating profit dropped 18.4% due to revenue decline. Earnings per share were reported at $0.037 (HK$0.29), nearly half the $0.059 (HK$0.46) in FY 2019. The company’s board has proposed a final dividend of HK$0.12 per share

Due to the pandemic and volatile macro environment, same-store sales (SSS) in Mainland China slid down 15.1%, whilst same store average selling price stayed on a favourable trend with 11.7% growth.

Meanwhile, SSS in Hong Kong and Macau slumped 38.7% due to the sluggish business environment in Hong Kong.

Its retail network expanded to 3,850 points of sale (POS) as at 31 March, with a net addition of 716 POS during FY 2020. In Mainland China, the group opened 711 POS, whilst doing four in Hong Kong and Macau. In other markets, one POS was opened, including six net openings in neighbouring countries such as Korea, the Philippines, Singapore and Thailand.

E-commerce business recorded a retail sales value (RSV) growth of 3.4%, contributing to 5.2% of RSV and 14.4% of retail sales volume in Mainland China.