Chow Tai Fook: Hong Kong market recovery prospects are expected to be long

Financial News

Written by: Lin Leqian

2020-06-11 19:27

The pneumonia epidemic hit the retail industry. Zheng Zhigang, executive director of Chow Tai Fook (1929), said at the performance meeting that the group faced several challenges last year. With signs of recovery in the mainland market, he was cautiously optimistic about the business outlook in the short term. Executive Director Sun Zhiqiang added that there was a slight improvement in Hong Kong and Macau's business in May, but tourists failed to come to Hong Kong for consumption. They believe that the prospects for the recovery of the local market are long. The overall revenue for this fiscal year is expected to record high single-digit and low double-digit growth.

Executive Director Zheng Bingxi said that due to the low base of the Hong Kong market last year, it is expected that the same-store sales decline in the second half of the fiscal year will narrow or record year-on-year growth, and the annual turnover of Hong Kong business will fall by about 25 to 30%.

Executive Director Chen Shichang added that the mainland business has clearly recovered and stabilized. The sales performance in April has returned to 80% of the same period last year, and in May it has returned to 90%. The performance of the first 10 days in June is also in line with expectations. It is expected that this month's sales will be the same as last year. The same-store sales for the whole year can record a growth of 15 to 20%, while the turnover increased by 20 to 30%.

Plan to reduce up to 15 branches in Hong Kong

Huang Shaoji, Managing Director, pointed out that this fiscal year plans to close 10 to 15 branches in Hong Kong, and the opening of the mainland store opening in the first quarter is affected. With the gradual recovery of the retail market, the target for opening stores throughout the year is 400 to 450. Expected capital expenditure is about 1.0 billion to 1.1 billion yuan. In addition, he said that the group has applied for the government's "retail industry subsidy plan" and "employment protection plan", and has no plans to lay off employees. In the next 6 months, all executive directors and middle and high-level employees will be required to take 2 to 5 days of unpaid leave.

Zheng Bingxi mentioned that in the last fiscal year, about 20 branches in Hong Kong had to be renewed, the average rent was reduced by 14%, and the landlord provided about 30 million yuan in rent relief; and this year, about 40 branches have to renew the lease, and the expected reduction in rent Up to 25 to 40%, rent renewal can record a 25 to 30% drop, and this year's lease reduction will be about 10% to 15%.

Chow Tai Fook earned 36.6% less last year and cut future interest to 12 sen. Retail sales in Hong Kong and Macau fell 80% year-on-year from April to May

[Retail in Winter] Chow Tai Fook's same-store sales in Hong Kong and Macau rushed by 65% ​​year-on-year in the first three months of this year

Chow Tai Fook: Executive Director's salary reduction from February to April About 20 stores in Sancheng have resumed business

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