Oriental Watch (398) H2 2024 earnings summary

Executive summary

• Revenue declined 1.8% year-over-year to HK$3,639 million amid a slow recovery in Greater China and conservative consumer sentiment for luxury goods.

• Profit attributable to owners dropped 15.3% year-over-year to HK$250 million, with EPS at 51.40 HK cents.

• Gross profit decreased 3.2% to HK$1,151 million, with gross margin stable at 31.6%.

• Mainland China became the largest revenue contributor, surpassing Hong Kong.

• Final dividend of 5.8 HK cents and special dividend of 17.2 HK cents per share proposed.

Financial highlights

• Revenue: HK$3,639 million (down 1.8% year-over-year).

• Profit attributable to owners: HK$250 million (down 15.3% year-over-year).

• EPS: 51.40 HK cents (prior year: 60.62 HK cents).

• Gross profit: HK$1,151 million (down 3.2% year-over-year); gross margin 31.6%.

• Net assets: HK$1,796 million as of 31 March 2024.

Outlook and guidance

• Luxury watch industry expected to face continued challenges in 2024, with Swiss watch exports to Mainland China and Hong Kong dropping over 20% in Q1 2024.

• Group remains focused on prudent financial management, cost control, and selective network expansion.

• Plans to enhance service quality, diversify product mix, and leverage digital platforms for customer engagement.