The company's FY2024 revenue increased 14.82% year on year, and profit due to shareholders of the company increased 20.71% year on June 13. On June 13, the company announced its 2024 annual report: FY2024 achieved operating income of HK$108.713 billion, an increase of 14.82% year on year, and realized profit attributable to shareholders of HK$6.499 billion, equivalent to fully diluted EPS of HK$0.65, an increase of 20.71% year on year. Looking at the breakdown, 2HFY2024 achieved operating income of HK$59.187 billion, an increase of 22.92% over the previous year, and realized profit attributable to the Company's shareholders of HK$1,948 billion, which translates into a fully diluted EPS of HK$0.20, a decrease of 4.91% over the previous year.
At the same time, the company announced the main unaudited operating data from April 1 to May 31, 2024: the retail value of the company group decreased by 20.2% year on year, of which retail value in mainland China fell 18.8% year on year, and retail value in Hong Kong, China, Macau and other markets fell 29% year on year.
The company's FY2024 comprehensive gross margin decreased by 2.08 percentage points, the expense ratio decreased by 1.57 percentage points during the period, and the comprehensive gross margin of the FY2024 company was 20.50%, down 2.08 percentage points from the previous year. Looking at the breakdown, 2HFY2024's comprehensive gross margin was 16.80%, down 4.29 percentage points from the previous year.
The FY2024 company's expense ratio for the period was 12.88%, down 1.57 percentage points from the previous year. Among them, the sales/management/finance expenses ratio was 8.75%/3.48%/0.65%, respectively, and the year-on-year change was -1.88/ +0.005/+0.31 percentage points, respectively. The 2HFY2024 company's expense ratio for the period was 12.72%, down 1.84 percentage points from the previous year. Among them, the sales/management/finance expense ratios were 8.65%/3.43%/0.64%, respectively, with year-on-year changes of -2.02/-0.09/ +0.27 percentage points, respectively.
The number of FY2024 Group stores increased by 136. As of March 31, 2024, there were 7,782 Group stores (net increase of 136 as of March 31, 2023), including 7,403 Chow Tai ?$#@$ jewellery brand stores in mainland China (net increase of 143 on March 31, 2023), and 145 Chow Tai ?$#@$ jewellery brand stores in Hong Kong, China, Macau and other markets (net increase of 10 compared to March 31, 2023). In terms of products, the company's share of gold products has increased, and the Inheritance series has launched new products inspired by Tang Dynasty Helong.
Lower profit forecasts and maintain “buy” ratings
The company's profit performance was lower than our previous expectations, mainly due to a decline in the company's gross margin. Taking into account the slowdown in the company's store expansion rate and increased competition in the industry, we lowered our forecast of 7%/8% of the company's profit due to the company's FY2025/FY2026 to HK$74.39/8.182 billion, and added a forecast of HK$8.797 billion for profit attributable to the company's shareholders in FY2027. The company's channel power and brand power have strong competitive strength in the industry and maintain a “buy” rating.
Risk warning: Store expansion falls short of expectations, competition in the industry intensifies, and fluctuations in gold prices increase risks.