Hang Fung Gold declares 263.5% growth in profit

11 Jul '08

4 min read

Hang Fung Gold Technology Limited a vertically integrated brand jewellery enterprises in Hong Kong and Mainland China, announced its annual results for the year ended 31st March 2008 (FY2008).

In FY2008, the Group achieved remarkable performance in its retail business in Mainland China and a satisfactory growth in its wholesales and export business.

During the reporting period, the Group's consolidated turnover increased 9.0% to HK$3,407.63 million, whilst operating profit surged 118.4% to HK$524.28 million. Profit attributable to shareholders amounted to HK$304.36 million, representing a significant increase of 263.5%.

Basic earnings per share attributable to the shareholders of the Company was HK34.0 cents an increase of 214.8% as compared to FY2007.

The Board of Directors proposed to pay a final dividend of HK4.0 cents per share and a special dividend of HK2.0 cents per share.

Together with the interim dividend of HK2.8 cents per share, the total dividend for FY2008 was HK8.8 cents per share, representing a payout ratio of approximately 28 %, based on net profit attributable to shareholders.

"Benefited from Mainland China's robust economy, with the jewellery retail sector outperforming other sectors in particular, and the robust demand for high quality jewellery in Mainland China, we achieved impressive growth in retail sales turnover of Mainland China business during the year under review.

The retail network expansion initiative has also fostered our position in the jewellery retail market in Hong Kong and Mainland China." Dr. Lam Sai Wing, chairman of Hang Fung Gold said.

Brand Retail Business:
During the reporting period, the Group focused its effort in expanding its network coverage in Mainland China and achieved relatively rapid network growth in the Eastern and Southern region.

Retail sales in China increased substantially by 97.9%, while same store sales also recorded a satisfactory growth of over 30% as a result of strong consumer spending power and enhanced operational efficiency.

The Group strategically locates its 3D-GOLD outlets in premier shopping mall chains in first tier cities in Mainland China to attract quality clientele and to capture the rising demand for high quality jewellery.

During the year, besides operating self-owned stores, the Group also accelerated its franchise scheme to gradually extend its presence through Mainland China.

In July, the Group's retail network reached around 200 outlets, spanning over 70 cities in Mainland China, Hong Kong and Macau.

In view of the Group's well managed franchise scheme, Hang Fung Gold is viewed by reputable international financial institutions as one of the quality franchisors in Mainland China.

Note 1: CLSA Report on China Retailing issued on 13 May, 2008
During the year, 3D-GOLD brand was accredited with the "China Well-known Trademark" by the Trademark Office State of Administration For Industry And Commence, which has been a testimony to the Group's brand recognition, underscoring the success of its brand marketing efforts.