Financial news
Written by: Lin Leqian
2019-11-28 19:21
Last updated: 2019-11-28 19:28The local retail market continued to suffer. Chow Tai Fook (1929) announced that Hong Kong and Macau same-store sales from October 1 to November 21 this year fell 38%, while same-store sales fell 48%. Executive Director Zheng Zhigang said in a conference call that the Hong Kong market will remain challenging in the coming June to December, while the mainland market will maintain steady growth. Group Executive Director and Managing Director Huang Shaoji said that it expects the sales decline from October to November to be similar to that of the second quarter, and that social events will come to an end as soon as possible.
Executive director and financial director Zheng Bingxi pointed out that in the second half of the year, about 20 stores in Hong Kong and Macau will need to renew their leases. The expected reduction in rent is 20 to 50%, with the most obvious reduction in street shops. It is expected that the annual renewal rent can be recorded at 14 To 16%. In FY2021, the leases of more than 40 stores have expired. The Group will continue to review store strategies and consider closing up to 14 to 16 stores.
No layoff plan and required employees to take unpaid leave
Huang Shaoji emphasized that the group currently has no layoff plan and does not require employees to take unpaid leave, which will focus on increasing their competitiveness, while reducing advertising and opening expenses, and will reduce administrative expenses to control costs.
Huang Shaoji continued to point out that the Group maintains its plan to open 600 branches in the Mainland throughout the year, 80% to 90% of which are located in lower-tier cities and county-level cities in the Mainland. It is expected that the same pace will be maintained in the next 3 years, and the proportion of franchised stores will reach 60% . In terms of e-commerce business, the Group recorded a 30% increase in same-store sales during the recent Double 11 Shopping Festival.
Regarding the level of dividends, Huang Shaoji said that the group's dividend payout ratio in the first half of the fiscal year was 78%, and it is expected that the same level will be maintained throughout the year.
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