Oriental Watch (398) H1 2025 earnings summary

Executive summary

• Revenue for the six months ended 30 September 2024 decreased by 2.6% year-over-year to HK$1,800 million, reflecting weaker consumer sentiment and reduced demand for luxury goods.

• Gross profit declined by 2.1% year-over-year to HK$560 million, with gross margin stable at 31.1%.

• Operating profit dropped 13.5% year-over-year to HK$186 million, mainly due to higher rental and renovation expenses.

• Profit attributable to owners fell 13.8% year-over-year to HK$119 million.

• The Group operated 44 retail points in Greater China and maintained a cautious approach to inventory and cost management.

Financial highlights

• Revenue: HK$1,800 million (down 2.6% year-over-year); Gross profit: HK$560 million (down 2.1% year-over-year); gross margin 31.1%.

• Operating profit: HK$186 million (down 13.5% year-over-year); Net profit attributable to owners: HK$119 million (down 13.8% year-over-year).

• Basic and diluted EPS: 24.50 HK cents (2023: 28.32 HK cents).

• Cash and cash equivalents: HK$1,089 million as at 30 September 2024; no bank loans, gearing ratio nil.

• Interim and special dividends totaling HK$119.9 million declared for the period.

Outlook and guidance

• Management expects gradual recovery in watch sales, supported by government stimulus and anticipated monetary easing.

• Plans to enhance service quality, boost brand recognition, and maintain financial prudence.