Emperor Watch & Jewellery (887) H1 2024 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2024 rose 11.5% year-over-year to HK$2,597 million, with gross profit up 7.6% to HK$780 million and net profit stable at HK$185 million.

• Jewellery segment sales surged 77.4% to HK$965 million, offsetting an 8.6% decline in watch segment sales to HK$1,632 million.

• The Group operates 90 stores across Hong Kong, Macau, Mainland China, Singapore, and Malaysia, with new store openings in Macau and Mainland China during the period and continued expansion in Southeast Asia.

• Interim dividend declared at HK0.65 cent per share, down from HK0.76 cent last year.

Financial highlights

• Adjusted EBITDA increased 2.9% to HK$282 million year-over-year.

• Basic earnings per share was HK2.72 cents, compared to HK2.74 cents a year ago.

• Cash and cash equivalents rose to HK$733 million from HK$458.8 million at year-end 2023, with no bank borrowings and a net cash position.

• Current ratio improved to 7.6 from 7.3 at year-end 2023; quick ratio rose to 1.6 from 1.5.

• Staff costs rose to HK$185 million from HK$161 million year-over-year.

Outlook and guidance

• Uncertainty in interest rate cuts and slow recovery in property and stock markets may affect luxury consumption.

• Expansion of the Individual Visit Scheme and government initiatives are expected to boost tourism and consumer sentiment.

• The Group will focus on branding, marketing, and cautious expansion in China and Southeast Asia.