Hong Kong-listed Chow Tai Fook Jewellery Group has announced a fall of 4.3 per cent in revenue to HKD94.68 billion (MOP97 billion/ US$12.1 billion) for the financial year ending 31 March 2023.
According to a stock filing carrying the group’s unaudited results issued on Thursday, Chow Tai Fook attributed the fall in revenue to the Covid-19 pandemic, which hit the jeweller hardest in the third quarter of the financial year.
However, the group added that it managed to stave off the impact of the pandemic in spite of the challenges posed by it.
“Our steady expansion of the retail network there, combined with the recovery post the shift in pandemic-control measures in 4QFY2023, helped mitigate the majority of the impact for FY2023,” said the group in the filing.
In that financial year, although revenue from the Chinese mainland slipped 6.1 per cent, it still accounted for 86.2 per cent of the group’s revenue.
As for Hong Kong, Macau and other markets, revenue rose by 8.8 per cent after benefiting from the lifting of Covid-related border restrictions early this year.
In particular, the relaxation of social distancing measures in the neighbouring special administrative region (SAR) had supported pent-up bridal demand, leading this segment to return to over 70 per cent of the corresponding 2019 level in the first quarter of 2023.
The group also reported a promising increase in same-store sales growth (SSSG) in Hong Kong and Macau, driven by the return of mainland Chinese tourists and bridal demand, given the low base that was compared.
The company’s SSSG in Hong Kong leaped by 36.6 per cent, while Macau experienced a 17.8 percent decline due to its dependence on tourist spending.
The SSSG reached an impressive 96.5 per cent in the fourth quarter of the financial year in the two SARs altogether, resulting in a strong SSSG of 18.3 per cent for the full year.
Although the early signs of recovery in tourist mobility and retail activity in the two SARs have not taken its business back to pre-pandemic levels, Chow Tai Fook has painted a rosy picture of its business prospects for the upcoming year, citing the central government’s GDP growth target of around 5 per cent for 2023.
“The government’s focus on rebuilding business will be a positive catalyst to drive retail and economic activity in the Mainland, as well as in Hong Kong and Macau, boosting our confidence in the market’s gradual economic recovery and its positive impact on the jewellery market.” The group said.
Chow Tai Fook was forced to close a net of nine points of sale (POS) in Hong Kong and Macau to enhance operational efficiency, leaving it with 85 POS in those markets as of 31 March 2023.
However, the group net opened nine stores in Southeast Asia in order to tap into emerging opportunities from the retail market growth there.
