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Hong Kong company reporting season

Hong Kong tycoon Henry Cheng shrugs off retirement rumours at Chow Tai Fook results announcement

Net profit at world’s largest listed jeweller by market value amounts to HK$4.1 billion, misses analysts’ forecast of 36.3 per cent

PUBLISHED : Thursday, 07 June, 2018, 9:06pm
UPDATED : Friday, 08 June, 2018, 3:40pm

Henry Cheng Kar-shun reassured the public on Thursday that he was still setting the strategy and overall direction at Chow Tai Fook Jewellery. In his first appearance in a year, Cheng, who is the chairman of the jeweller as well as Hong Kong developer New World Development, shrugged off speculation he would retire soon.

“Teamwork is important. The daily operation of the company will mostly be handled by the team,” he said during the announcement of the company’s results.

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Cheng is rumoured to have suffered from an illness, said to be a stroke, last year. And when he was asked about his son Adrian Cheng Chi-kong’s progress at the company, Cheng said he was in good health and had no intention of retiring soon, so it was too early to comment on any succession plans.

He said Adrian Cheng had been performing “very well”. “But since he is still young, he needs some time to accumulate experience, which cannot be done overnight,” said Cheng senior. “I hope he can gain experience, and be better and more mature.”

Chow Tai Fook, the world’s largest listed jeweller by market value, reported robust online growth, with its retail sales volume rising by 73.2 per cent, thanks to greater cooperation with major online platforms such as Tmall and JD.com.

Its net profit amounted to HK$4.1 billion (US$525 million), or 40.9 Hong Kong cents per share. The result missed a forecast of 36.3 per cent by analysts polled by Bloomberg. Its revenue amounted to HK$59.16 billion, up 15.4 per cent from the previous year.

The company will pay a final dividend amounting to 15 Hong Kong cents per share, up from 10 Hong Kong cents during the previous financial year.

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The company also announced a special dividend of 30 Hong Kong cents per share, down 5 cents from the previous year. This means the full-year dividend for the financial year will amount to HK$57 per share.

Chow Tai Fook also announced plans to open more than 300 stores as shoppers were back to buying jewellery, boosting its net profit growth to 34 per cent for the financial year ending in March this year, thanks in part to stronger sales in the mainland China market.

The company said it expected to have about 300 openings on the mainland, five in Hong Kong and Macau, with further extension in Southeast Asia in the pipeline for the current financial year.

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The company said it also expected to open about 40 stores under two subsidiary brands on the mainland.

“The growth momentum of tier 3 and other cities [on the mainland] has significantly sped up,” said Kent Wong Siu-kee, managing director at the jeweller. “The performance there could be comparable to that of tier 1 and tier 2 cities.”

The results were announced after the market closed. Shares in Chow Tai Fook dipped by 0.9 per cent to HK$11.08 on Thursday.

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