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.

• SSSG in Hong Kong and Macau was +4% in Q1 but fell 24% in Q2; Mainland China SSSG dropped 9% in Q1 and also fell 24% in Q2, with gold jewellery dominating sales but diamond and watch sales declining.

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

• 25 stores were opened and 47 closed, mainly in Mainland China, resulting in a net decrease in store count.

Financial highlights

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

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

• Interim dividend declared at HK15.0 cents per share (2023: HK20.0 cents), with a payout ratio of 19%.

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

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

Outlook and guidance

• Management expects continued economic headwinds in the second half of 2024 and is focused on optimizing store networks, selective new openings, product innovation, and omni-channel sales.

• Emphasis on efficiency, brand strength, and inventory management to improve performance.