Chow Sang Sang Holdings International (116) H1 2024 earnings summary

Executive summary

• Turnover from continuing operations for the first half of 2024 decreased by 13% year-over-year to HK$11,313 million, with profit attributable to owners down 36% to HK$526 million and profit from continuing operations down 39% to HK$502 million.

• Gross profit margin improved slightly to 28.3% from 28.0% through product assortment adjustments.

• Retail segment accounted for 97.7% of turnover in 1H 2024.

• SSSG in Mainland China and Hong Kong/Macau both declined 24% by the end of Q2 2024, with gold jewellery dominating sales but diamond and watch sales declining.

• 25 stores were opened and 47 closed, mainly in Mainland China, resulting in a net decrease of 22 stores to 1,010 as of 30 June 2024.

Financial highlights

• Retail revenue fell 13% year-over-year to HK$11,049 million; other businesses revenue dropped 20% to HK$264 million.

• Gross profit decreased 12% year-over-year to HK$3,198 million.

• Basic and diluted EPS for the period was 77.6 cents, down 36% year-over-year.

• Interim dividend per share was 15.0 HK cents, down 25%, with a payout ratio of 19%.

• Equity attributable to owners remained stable at HK$12,208 million.

• Cash and cash equivalents stood at HK$1,399 million as of 30 June 2024.

Outlook and guidance

• Management anticipates prolonged economic headwinds in the second half of 2024 and will focus on optimizing store networks, selective new openings, product innovation, and omni-channel sales.

• Continued focus on omni-channel retailing and digital sales, with online sales comprising 20% of Mainland China sales in 1H 2024.

• Emphasis on inventory management and efficiency improvements.