周大福(1929.HK)FY2024年报点评:业绩符合预期 核心利润增长28.9%

Chow Tai ?$#@$ (1929.HK) FY2024 Report Review: Performance is in line with expectations, core profit increased by 28.9%

信達證券 ·  Jun 19

Incident: The company announced FY 2024 results, achieving revenue of HK$108.713 billion, an increase of 14.8%, and an increase of 18.5% at the fixed exchange rate; achieved core profit of HK$12.163 billion, an increase of 28.9%; and profit attributable to shareholders of HK$6.499 billion, an increase of 20.7%. FY2024 earns HK$0.65 per share. It is recommended to pay a final dividend of HK$0.30 per share and HK$0.55 per share for the whole year, with a dividend payout rate of 84.6% for the whole year.


Mainland China achieved revenue of HK$89.698 billion, up 9.9% year over year and 14.1% at a fixed exchange rate.

By channel, direct management/franchise increased by 3.6%/15.1% respectively. As of 2024.3.31, there were 7,403 Chow Tai Fu jewelry stores in mainland China, with a net opening of 143 stores, including 21/122 direct-operated/franchised stores respectively. FY2024 sales in mainland China were +1.8% year-on-year, of which inlay and gold were -14.4%/+6.4%.

Hong Kong, Macao, Taiwan and overseas achieved revenue of HK$19.015 billion, an increase of 45.6% over the same period, accounting for 17.5% of total revenue.

By channel, the increase in passenger traffic from mainland China led to a 40.4% increase in retail revenue, and a rebound in the duty-free business from Hainan Province led to an increase of 85.6% in wholesale revenue. FY2024 RSV in Hong Kong, China, and Macau, China, and other markets increased by 32%/53%/119%, respectively, and Chow Tai ?$#@$ jewelry brands opened 2/0/8 stores respectively. FY2024 sales were +42.4% year-on-year in Hong Kong and Macau, of which inlay and gold were -4.8%/+67.7% respectively.

Gold products contributed to a major increase in sales. By product, the total sales revenue of FY2024 products was HK$107.757 billion, an increase of 15%. Among them, inlay/ gold/ watch revenue was -13.3%/+22.5%/+0.5%, respectively, accounting for 13.4%/82.0%/4.6%.

FY2024 core profit margin was 11.2%, up 1.2PCT year over year. Looking at the breakdown, the adjusted gross profit margin was 22.8%, down 0.9 PCT year on year, and SG&A% was 12.2%, down 2.3 PCT year on year. Among them, the decline in adjusted gross margin was mainly due to an increase in the share of sales of gold products (affecting 1.5 PCT), an increase in the share of sales in the wholesale business (affecting 0.4 PCT), as well as regional share and jewelry trade factors (a total negative impact of 0.4 PCT). The profit elasticity brought about by the rise in gold prices contributed to a gross margin increase of 1.4 PCT. SG&A decreased by 2.9% year on year, causing SG&A% to drop by 2.3 PCT, mainly due to savings in packaging materials and marketing expenses. Both expenses decreased by 44.2%/17.0% respectively.

FY2024 profit before tax was HK$8.728 billion. The difference with core profit was mainly due to unrealized losses from gold leasing. The unrealized loss for FY2024 gold leasing was HK$2,489 million, and the unrealized loss for FY2023 was HK$1,230 million. This difference was mainly due to the 11.9% year-on-year increase in the closing price of gold in London during FY 2024.

Profit forecast: Looking ahead to FY2025, due to gold prices and sales pressure in April-May, the Group's retail value fell 20.2% from 2024.4.1-2024.5.31, and same-store sales in mainland China/Hong Kong and Macau were -27.6%/-32.0% respectively.

We expect the company's FY2025-FY2027 revenue to be HK$1055/1092/111.8 billion, respectively, -3%/+2%, net profit to mother of 68.57/71.15/HK$7.307 billion, an increase of 5%/4%/3%, and EPS of HK$0.69/0.71/0.73, respectively, corresponding to the closing price PE 13/12/12X on June 18.

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.

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