Chow Sang Sang Holdings International (116) H2 2024 earnings summary

Executive summary

• Turnover from continuing operations fell 15% year-over-year to HK$21,176 million in 2024, with retail and wholesale segments both declining due to economic uncertainty and record-high gold prices impacting demand in Mainland China and Hong Kong/Macau.

• Profit attributable to owners dropped 20% to HK$806 million, and basic EPS decreased 20% to 119.1 HK cents; profit from continuing operations was down 27% to HK$772 million.

• Dividend per share was HK$0.51, down 15% from the prior year, with a payout ratio of 43%.

• Store network rationalization continued, with 48 openings and 122 closures, reducing total stores from 1,032 to 958, mainly in Mainland China.

• Gross profit margin improved by 1.9 percentage points to 28.3% through product mix optimization.

Financial highlights

• Retail segment revenue declined 15% to HK$20,697 million; wholesale of precious metals dropped 37% to HK$451 million.

• Total segment results fell 26% to HK$1,059 million; profit before tax dropped 27% to HK$996 million.

• Earnings per share (basic and diluted) decreased 20% to 119.1 cents; from continuing operations, EPS fell 27% to 114.1 cents.

• Equity attributable to owners rose 2% to HK$12,430 million; equity per share increased 3% to HK$18.5.

• Retail turnover in Mainland China and Hong Kong/Macau both declined 15% and 16% respectively; Taiwan grew 18%.

Outlook and guidance

• Strategy focuses on cultivating the high-end segment, omni-channel retailing, and expanding presence in luxury locations, with cautious optimism for Mainland China due to monetary easing and property support.

• Market expected to remain challenging in 2025, with a flat outlook and potential improvement in the second half as economic stimulus measures take effect.

• Gold product sales anticipated to be volatile as prices remain high; continued focus on store consolidation and omni-channel strategy.

• Expansion planned for new gold-diamond collection “YUYU”.