Event: The company released FY2024Q4 (3 months ending 2024.3.31), and the Group's retail value increased by 12.4%.
Comment:
Mainland China's Spring Festival sales performance was impressive, and joining new stores contributed mainly to the increase. Retail value in mainland China also increased by 12.4%, contributing 88.6% of the Group's retail value, mainly due to: 1) consumers' continued preference for gold; 2) the company's successful festival promotions & new products in the Year of the Dragon; 3) the steady climb and operational efficiency of joining new stores. Among them, retail value of FY2024Q4 directly managed stores (stores that have been in operation for 2 years) fell 2.7% year on year, and same-store sales fell 6.9% year on year. The retail value of franchised stores increased 18.3% year on year, contributing 70.4% of mainland China's retail value (FY2023Q4 accounts for 67.2%).
China's Hong Kong, Macau and other markets continue to benefit from the recovery in travel spending. The retail value of FY2024Q4 in Hong Kong, Macau and other markets also increased by 12.8%, contributing 11.4% of the Group's retail value. The retail value of the same store in Hong Kong and Macau increased by 4.5%, mainly due to volume; among them, the same store in Hong Kong, China increased by 8.9%, and the same store in Macau, China declined by 7.1%.
Gold products benefited from the high consumption boom brought about by rising gold prices and the company's successful promotion and continued strong performance in the Year of the Dragon. The retail value of FY2024Q4 gold products increased by 3.4%/16.6% in mainland China, Hong Kong and Macau, respectively. The average sales price at the same store was HK$5,700/7,500, respectively, up 9.6%/7.1% year on year.
Inlaid jewelry was greatly affected by macroeconomic fluctuations. The retail value of FY2024Q4 in mainland China/Hong Kong and Macau decreased by 19.5%/27.2% respectively, and the average sales price at the same store was HK$8,200/15,800, respectively, down 2.4%/11.7% year on year. The retail value of FY2024Q4 gold products increased by 18.8%/25.8% year-on-year in mainland China/Hong Kong, Macao and other markets respectively, accounting for 84.8%/81.0% of retail value, respectively, and inlaid jewelry decreased by 14.2%/24.3% year-on-year, respectively.
FY2024Q4 has closed its stores properly, and we will continue to focus on high-quality store growth in the future. FY2024Q4 closed 89 Chow Tai Fu jewelry stores in mainland China, and 143 stores were opened in fiscal year FY2024. FY2024 opened 10 Chow Tai ?$#@$ jewellery stores in Hong Kong, Macau and other markets in China. As of 2024.3.31, the company has a total of 7,548 Chow Tai ?$#@$ jewelry stores, including 7,403 in mainland China (76.7% are franchisees), 87 in Hong Kong and Macau, and 58 in other markets; a total of 234 other brand stores, including 224 in mainland China and 10 in other markets; a total of 7,782 stores worldwide.
Profit forecast: We expect the company's FY2024-FY2026 revenue to be HK$1121/120/126.9 billion, up 18%/7%/6%; net profit to mother of 71.48/77.79/HK$8.301 billion, up 33%/9%/7%; EPS of HK$0.72/0.78/0.83, respectively, corresponding to the closing price of PE16/15/14X on April 12.
Risk warning: Store opening falls short of expectations, same-store growth falls short of expectations, gold prices fluctuate sharply, promotion of new products falls short of expectations, and industry competition intensifies.