2021060800311.pdf - :: HKEX :: HKEXnews ::

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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(Incorporated in the Cayman Islands with limited liability)

Stock Code: 1929

CHOW TAI FOOK JEWELLERY GROUP LIMITED周大福珠寶集團有限公司

ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 MARCH 2021AND

THE UNAUDITED KEY OPERATIONAL DATA FROM 1 APRIL TO 31 MAY 2021• TheGroup’s revenuewasupby23.6% inFY2021,drivenbyour retailexpansion inMainland

Chinaandasolidrecoverytherein2HFY2021.VersusFY2019,revenuewasupby5.3%onatwo-yearbasis.

• SameStoreSales(1)(“SSS”)inMainlandChinaincreasedby31.9%whereasHongKongandMacaurecordedadeclineof41.3%duringtheyear.

• Coreoperatingprofit(2)increasedby51.7%year-on-year.Coreoperatingprofitmargin(2)increasedto12.3%,thankstoourwellcontainedSG&Aandoperatingleverage.

• Profitattributabletoshareholders increasedby107.7% inFY2021,mainlybenefittedfromone-off rent concession,unrealisedgainongold loansplus foreignexchangegain, nettingoffimpairmentonassetsandgoodwill.

• Retailnetworkexpandedto4,591POSasat31March2021,withanetadditionof741POSinFY2021.• With a solid foundation thathas alreadybeenbuilt throughour “Smart+2020” strategic

framework,wearepleased tomove forwardwithourDual-ForceStrategy.OurDual-ForceStrategywill steer us towards the continual expansion of physical footprint and digitalempowerment inorder tocontinuedeliveringexceptional customerexperience thatcreateslong-termbranddifferentiationandloyalty.

FINANCIAL HIGHLIGHTS2021 2020

Fortheyearended31March HK$ million HK$ million YoYchange

Revenue 70,164 56,751 23.6%Grossprofit 20,075 16,096 24.7% Gross profit margin 28.6% 28.4% Adjusted gross profit margin(3) 28.2% 29.6%Coreoperatingprofit(2) 8,630 5,687 51.7% Core operating profit margin(2) 12.3% 10.0%Profitattributabletoshareholdersof theCompany

6,026 2,901 107.7%

Earningspershare(HK$) 0.60 0.29 107.7%Dividendpershare(4)(HK$) 0.40 0.24(1) “Same Store Sales” for FY2021 is the Retail Sales Value (“RSV”) from the self-operated points of sale (“POS”) of CHOW TAI FOOK

JEWELLERY existing as at 31 March 2021 and which have been opened prior to 1 April 2019. RSV from franchised POS and other channels are not included

(2) Core operating profit and the corresponding margin, a non-IFRS measure, being the aggregate of adjusted gross profit and other income, less selling and distribution costs and general and administration expenses (“SG&A”), which the Company believes is useful in gaining a more complete understanding of its operational performance and the underlying trend of its businesses

(3) Adjusted gross profit margin, a non-IFRS measure, eliminates the effect of unrealised loss (gain) on gold loans, which the Company believes is useful in gaining a more complete understanding of its operational performance and the underlying trend of its businesses

(4) The proposed final dividend of HK$0.24 per share is subject to the approval of shareholders at the forthcoming annual general meeting. Dividend payout ratio for FY2021 is approximately 66.4% on a full year basis

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ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2021

Theboardofdirectors(the“Board”or“Directors”)ofChowTaiFookJewelleryGroupLimited(the“Company”,“we”or“ChowTaiFook”)ispleasedtoannouncetheauditedannualresultsof theCompanyand itssubsidiaries (collectively, the“Group”) fortheyearended31March2021 (“FY2021”), togetherwith comparative figures for theyearended31March2020(“FY2020”)asfollows:

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFor the year ended 31 March 2021

2021 2020Notes HK$ million HK$ million

Revenue 2 70,163.8 56,750.8Costofgoodssold (50,089.1) (40,654.6)

Gross profit 20,074.7 16,096.2Otherincome 3 691.7 436.6Sellinganddistributioncosts (8,634.9) (8,689.7)Generalandadministrativeexpenses (3,213.7) (2,867.1)Othergainsandlosses 4 430.8 (147.1)Otherexpenses 5 (664.1) (146.3)Shareofprofitsofanassociate 4.6 3.5Interestincome 81.5 78.0Financecosts (376.0) (559.6)

Profit before taxation 6 8,394.6 4,204.5Taxation 7 (2,218.5) (1,221.4)

Profit for the year 6,176.1 2,983.1

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2021 2020Note HK$ million HK$ million

Other comprehensive income/(expense)Item that will not be reclassified to profit or loss: —remeasurementofdefinedbenefitscheme 18.1 (24.0)

Item that may be reclassified subsequently to profit or loss: —exchangedifferencesarisingontranslation offoreignoperations

1,235.1 (980.6)

Other comprehensive income/(expense) for the year

1,253.2 (1,004.6)

Total comprehensive income for the year 7,429.3 1,978.5

Profit for the year attributable to: ShareholdersoftheCompany 6,026.4 2,901.0 Non-controllinginterests 149.7 82.1

6,176.1 2,983.1

Total comprehensive income for the year attributable to: ShareholdersoftheCompany 7,223.8 1,937.2 Non-controllinginterests 205.5 41.3

7,429.3 1,978.5

Earnings per share — Basic and Diluted 8 HK60.3 cents HK29.0cents

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (Continued)For the year ended 31 March 2021

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CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAt 31 March 2021

2021 2020Notes HK$ million HK$ million

Non-current assets Property,plantandequipment 4,614.6 4,641.3 Right-of-useassets 1,792.8 2,288.0 Investmentproperties 214.9 225.4 Goodwill – 231.5 Otherintangibleassets 158.0 207.6 Jewellerycollectibles 1,520.1 1,520.1 Prepaymentanddeposits 229.8 248.3 Financialassetsatfairvaluethrough profitorloss

22.0 21.0

Investmentsinassociates 23.8 11.7 Amountsduefromassociates 51.1 57.5 Loanreceivables 11.8 15.6 Deferredtaxassets 426.3 570.1

9,065.2 10,038.1

Current assets Inventories 10 43,011.4 42,538.4 Tradeandotherreceivables 11 6,180.4 5,340.8 Amountsduefromassociates 4.6 – Loanreceivables 8.9 7.9 Taxationrecoverable 5.8 99.0 Cashandcashequivalents 6,031.9 7,219.2

55,243.0 55,205.3

Current liabilities Tradeandotherpayables 12 17,240.0 12,430.0 Amountsduetonon-controlling shareholdersofsubsidiaries

66.0 97.9

Taxationpayable 721.8 388.6 Bankborrowings 4,619.0 10,533.0 Goldloans 5,725.4 11,280.4 Leaseliabilities 770.0 896.8

29,142.2 35,626.7

Net current assets 26,100.8 19,578.6

Total assets less current liabilities 35,166.0 29,616.7

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2021 2020HK$ million HK$ million

Non-current liabilities Bankborrowings 1,798.9 897.5 Leaseliabilities 726.0 900.3 Retirementbenefitobligations 238.8 260.2 Deferredtaxliabilities 764.0 505.1 Otherliabilities 70.7 62.8

3,598.4 2,625.9

Net assets 31,567.6 26,990.8

Share capital 10,000.0 10,000.0Reserves 20,767.1 16,343.3

Equity attributable to shareholders of the Company

30,767.1 26,343.3

Non-controlling interests 800.5 647.5

31,567.6 26,990.8

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)At 31 March 2021

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 31 March 2021

1. BASIS OF PREPARATION

New and amended standards adopted by the Group

TheGrouphasappliedthefollowingstandardsandamendmentswhicharefirsteffectivefortheirannualreportingperiodcommencing1April2020.

IFRS3(Amendments) DefinitionofaBusinessIAS1andIAS8(Amendments) DefinitionofMaterialConceptualFrameworkforFinancial Reporting2018

RevisedConceptualFrameworkforFinancialReporting

Theapplicationof theabovenewandamended IFRSs inthecurrentyearhashadnomaterial impactontheGroup’sfinancialperformanceandpositionsforthecurrentandprioryearsand/oronthedisclosuressetoutintheseconsolidatedfinancialstatements.

New standards and interpretations not yet adopted

Certainnewaccountingstandardsandinterpretationshavebeenpublishedthatarenotmandatoryfor31March2021reportingperiodandhavenotbeenearlyadoptedby theGroup.Thesestandardsarenotexpected tohaveamaterial impacton theentity in the currentor future reportingperiodsandonforeseeablefuturetransactions.

New standards, amendments and improvements to existing standards

AnnualImprovementsProject AnnualImprovementstoHKFRSs2018–20201

IFRS3,IAS16andIAS37(Amendments) Narrow-scopeamendments1

IAS1(Amendments) ClassificationofLiabilitiesasCurrentorNon-current2IFRS17 InsuranceContracts2IFRS10andIAS28(Amendments) SaleorcontributionofAssetsbetweenanInvestorandits

AssociateorJointVenture3

1 Effectiveforaccountingperiodsbeginningonorafter1January20222 Effectiveforaccountingperiodsbeginningonorafter1January20233 Effectiveforaccountingperiodsbeginningonorafteradatetobedetermined

2. REVENUE AND SEGMENT INFORMATION

Revenuerepresents thenetamountsreceivedandreceivable forgoodssoldandservicesprovided lessreturnsandnetoftradediscounts.

Forthepurposesof resourceallocationandperformanceassessment, informationreportedtothechiefoperatingdecisionmaker (the“CODM”),whichcomprisesexecutivedirectorsof theCompany,mainlyfocusesonthe locationofmanagement.Revenuederivedfromeach locationofmanagement is furtheranalysed into those from retail andwholesalemarketswhen reviewedby theCODM.TheGroup’sreportableandoperatingsegmentsfortheyearsended31March2021and2020includedtwosegments,namely(i)businessintheMainlandChinaand(ii)businessinHongKong,Macauandothermarkets.

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2. REVENUE AND SEGMENT INFORMATION (Continued)

(a) Analysis of the Group’s revenue and results by reportable segment

For the year ended 31 March

Mainland ChinaHong Kong, Macau and

other markets Total2021 2020 2021 2020 2021 2020

HK$ million HK$ million HK$ million HK$ million HK$ million HK$ million

RevenueExternalsales—Retail 35,716.1 26,796.0 9,122.8 14,875.3 44,838.9 41,671.3—Wholesale(note i) 23,982.1 13,966.8 1,342.8 1,112.7 25,324.9 15,079.5

Segment/Grouprevenue 59,698.2 40,762.8 10,465.6 15,988.0 70,163.8 56,750.8Inter-segmentsales(note ii) – – 2,772.8 2,126.3 2,772.8 2,126.3

59,698.2 40,762.8 13,238.4 18,114.3 72,936.6 58,877.1

Adjustedgrossprofit (beforeelimination)

16,710.9 12,432.2 2,743.5 4,244.3 19,454.4 16,676.5

Inter-segmenteliminations – – 332.2 130.5 332.2 130.5

Adjustedgrossprofit 16,710.9 12,432.2 3,075.7 4,374.8 19,786.6 16,807.0Otherincome 425.6 279.4 266.1 157.2 691.7 436.6Sellinganddistributioncostsand generalandadministrativeexpenses

(8,910.3) (7,615.7) (2,938.3) (3,941.1) (11,848.6) (11,556.8)

Coreoperatingprofit(segmentresult) 8,226.2 5,095.9 403.5 590.9 8,629.7 5,686.8

Unrealisedgain/(loss)ongold(note iii) 288.1 (710.8)Others(note iv) (228.7) (289.9)Interestincome 81.5 78.0Financecosts (376.0) (559.6)

Profitbeforetaxation 8,394.6 4,204.5

Othersegmentinformationincluded inmeasurementofcoreoperating profit(segmentresult):Concessionairefees 1,990.5 1,583.3 0.3 1.4 1,990.8 1,584.7Operatingleaserentalsinrespect ofrentedpremises

145.9 135.6 155.7 116.0 301.6 251.6

Staffcosts 3,454.5 3,027.7 1,185.2 1,532.8 4,639.7 4,560.5Depreciationandamortisation 1,036.3 964.2 1,082.8 1,405.7 2,119.1 2,369.9

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(a) Analysis of the Group’s revenue and results by reportable segment (Continued)

Notes:

(i) Wholesale revenue represents revenue from jewellery trading, sales to franchiseesand retailersandprovisionofservicestofranchisees.

(ii) Inter-segmentsalesarechargedatapricemutuallyagreedbybothparties.

(iii) AfairvaluegainofHK$288.1million(2020:lossofHK$710.8million)hasnotyetbeenrealisedduetotimingdifferenceintherecognitionoftheimpactofchangesingoldpricebetweengoldloans(shortposition)andgoldinventories(longposition).

(iv) Othersrepresentothergainsandlosses,otherexpensesandshareofprofitsofanassociate.

Adjustedgrossprofitrepresentsthegrossprofitgeneratedfromeachsegmentwithoutallocationofunrealised (loss)/gainongold.Coreoperatingprofit represents theprofit generated fromeachsegmentwithoutallocationofunrealised(loss)/gainongold,othergainsandlosses,otherexpenses,shareofprofitsofanassociate, interest incomeandfinancecosts.ThisisthemeasurereportedtotheCODMforthepurposesofresourceallocationandperformanceassessment.

(b) Analysis of the Group’s assets and liabilities by reportable segment

As at 31 March

Segment assets




Property,plantandequipment 3,603.0 3,437.8 1,011.6 1,203.5 4,614.6 4,641.3Right-of-useassets 634.2 589.5 1,158.6 1,698.5 1,792.8 2,288.0Investmentproperties 17.7 17.2 197.2 208.2 214.9 225.4Goodwill – 193.3 – 38.2 – 231.5Otherintangibleassets 111.8 142.8 37.3 47.6 149.1 190.4Jewellerycollectibles – – 1,520.1 1,520.1 1,520.1 1,520.1Prepaymentanddeposits 97.9 96.5 131.9 151.8 229.8 248.3Inventories 26,681.8 24,547.8 16,329.6 17,990.6 43,011.4 42,538.4Tradeandotherreceivables 5,538.7 4,698.2 641.7 642.6 6,180.4 5,340.8Taxationrecoverable – – 5.8 99.0 5.8 99.0

Total segment assets 36,685.1 33,723.1 21,033.8 23,600.1 57,718.9 57,323.2

Unallocated: Otherintangibleassets 8.9 17.2 Financialassetsatfairvalue throughprofitorloss

22.0 21.0

Investmentsinassociates andamountsduefrom associates

79.5 69.2

Loanreceivables 20.7 23.5 Deferredtaxassets 426.3 570.1 Cashandcashequivalents 6,031.9 7,219.2

Total assets 64,308.2 65,243.4

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(b) Analysis of the Group’s assets and liabilities by reportable segment (Continued)

As at 31 March

Segment liabilities




Tradeandotherpayables (15,891.4) (11,338.5) (1,348.6) (1,091.5) (17,240.0) (12,430.0)Taxationpayables (554.6) (227.9) (167.2) (160.7) (721.8) (388.6)Leaseliabilities (500.4) (472.3) (995.6) (1,324.8) (1,496.0) (1,797.1)

Total segment liabilities (16,946.4) (12,038.7) (2,511.4) (2,577.0) (19,457.8) (14,615.7)

Unallocated: Amountduetonon-controlling shareholdersofsubsidiaries

(66.0) (97.9)

Bankborrowings (6,417.9) (11,430.5) Goldloans (5,725.4) (11,280.4) Retirementbenefitsobligations (238.8) (260.2) Deferredtaxliabilities (764.0) (505.1) Otherliabilities (70.7) (62.8)

Total liabilities (32,740.6) (38,252.6)

(c) Analysis of the Group’s assets by geographical area

TheGroup’snon-currentassets,excluding loanreceivables,deposits,amountsduefromassociates,financialassetsatfairvaluethroughprofitorlossanddeferredtaxassets,bygeographicalareasareasfollows:

As at 31 March


MainlandChina 4,843.8 4,853.9HongKong,Macauandothermarkets 3,528.8 4,331.4

8,372.6 9,185.3

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(d) Disaggregation of revenue

TheGroupderivesrevenuefromthetransferofgoodsandservicesatapointintimeandovertimeinthefollowingmajorproductcategories:

For the year ended 31 March


At a point in timeRetailsalesof—Gem-set,PlatinumandK-goldjewellery 11,213.9 11,596.8—Goldjewelleryandproducts 28,320.0 26,661.4—Watches 5,305.0 3,413.1

44,838.9 41,671.3

Wholesaletofranchisees/retailers 24,449.8 14,578.9Jewellerytrading 575.8 245.2

Over timeServiceincomefromfranchisees 299.3 255.4

70,163.8 56,750.8

Noindividualcustomercontributedover10%ofthetotalrevenueoftheGroupinbothyears.

3. OTHER INCOME


Commissionincome 69.2 111.9Governmentgrants(note) 353.7 81.0Otherincomefromfranchisees 109.5 67.3Rentalincome 34.6 35.3Interestincomefromtradereceivables 57.4 56.0Interestincomefromloanreceivables 2.3 4.8Others 65.0 80.3

691.7 436.6

Note: UnderAnti-EpidemicFundlaunchedbytheHongKongSARgovernment,wagesubsidiesofHK$159.6millionrelatedtotheEmploymentSupportSchemeandsubsidiesofHK$3.2millionrelatedtotheone-offRetailSectorSubsidySchemewererecognised intheyearended31March2021.OthergovernmentsubsidiesofHK$1.0million (2020:HK$0.6million)weregrantedtosubsidiariesinHongKong.

Government subsidiesofHK$185.3million (2020:HK$80.4million) granted to subsidiaries inMainlandChina andgovernmentsubsidiesofHK$4.6milliongrantedtosubsidiariesinotherjurisdictionswererecognisedintheyearended31March2021.

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4. OTHER GAINS AND LOSSES


Netforeignexchangegain/(loss) 336.4 (234.0)Lossondisposalofproperty,plantandequipment (32.3) (37.7)Gainonsurrenderofright-of-useassets 1.8 78.8COVID-19-relatedrentconcession 127.6 16.2Gainonacquisitionofsubsidiaries – 18.0Others (2.7) 11.6

430.8 (147.1)

5. OTHER EXPENSES


Donation 11.3 20.1Amortisationofotherintangibleasset 39.8 36.3Impairmentofamountduefromanassociate – 0.2Impairmentofgoodwill 231.5 26.3Impairmentofproperty,plantandequipment 66.6 13.0Impairmentofright-of-useassets 314.9 50.4

664.1 146.3

6. PROFIT BEFORE TAXATION


Profitbeforetaxationhasbeenarrivedataftercharging/(crediting):Directors’remuneration 87.5 97.1Staff’sretirementbenefitsschemecontributions 497.1 606.2Staffcosts 4,055.1 3,857.2

4,639.7 4,560.5

Costofinventoriesrecognisedasexpenses 48,702.8 38,333.7Concessionairefees 1,990.8 1,584.7Operatingleaserentalsinrespectofrentedpremises 301.6 251.6Depreciationofproperty,plantandequipment 1,024.1 975.0Depreciationofright-of-useassets 1,033.5 1,337.5Depreciationofinvestmentproperties 11.9 11.3Amortisationofotherintangibleassets(note) 49.6 46.1Recognition/(utilisation)ofallowancesoninventories (includedincostofgoodssold)

21.5 (24.1)

Lossallowancerecognised/(writtenback)ontradeand otherreceivables

149.7 (3.2)

Fairvaluelossarisingfromgoldloans(includedincostofgoodssold) 168.4 2,803.8GainonacquisitionofENZO(includedinothergainsandlosses) – 18.0Donations(includedinotherexpenses) 11.3 20.1Auditors’remunerationfortheCompany’sauditor—auditandrelatedservices 6.3 6.2—non-auditservices 2.1 2.2Auditor’sremunerationforotherauditors—auditandrelatedservices 6.6 3.9

Note: AmortisationofHK$39.8million (2020:HK$36.3million) related toHEARTSONFIREwas included innote5 “OtherExpenses”andtheremainingamountwasincludedingeneralandadministrativeexpenses.

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7. TAXATION


Thetaxationchargecomprises:

Currenttax: EnterpriseIncomeTax(“EIT”)inMainlandChina 1,314.5 789.9 HongKongProfitsTax 163.1 129.8 Macaucomplementarytax 5.0 31.6 Taxationinotherjurisdictions 3.6 3.3

1,486.2 954.6

Under/(over)provisioninprioryears: EITinMainlandChina 42.4 (6.8) HongKongProfitsTax 21.5 0.1 Taxationinotherjurisdictions 3.4 1.5

67.3 (5.2)

Deferredtaxcharge 526.4 149.3

Withholdingtax* 138.6 122.7

2,218.5 1,221.4

* Withholdingtaxmainlyrepresentswithholdingtaxon intra-group licence incomeand interest incomefromMainlandChinasubsidiaries.

HongKongProfitsTaxiscalculatedat16.5%oftheestimatedassessableprofitforbothyears.

Under theEnterprise IncomeTax Law (the“EIT Law”)of thePeople’sRepublicofChina (“PRC”)andImplementationRegulationoftheEITLaw,thetaxrateofthesubsidiaries inMainlandChina is25.0%forbothyears.

For certain subsidiariesof theCompany inMainlandChina, theyareentitled to the tax incentives inconnectionwiththedevelopmentofthewesternpartofMainlandChina.Theapplicabletaxrateis15.0%forbothyears.

Macaucomplementary tax is calculatedat themaximumprogressive rateof12.0%on theestimatedassessableprofitforbothyears.

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8. EARNINGS PER SHARE

ThecalculationofthebasicearningspersharefortheyearisbasedontheconsolidatedprofitattributabletoshareholdersoftheCompanyfortheyearandonthenumberof10,000,000,000(2020:10,000,000,000)sharesinissueduringtheyear.

Dilutedearningspershareisthesameasbasicearningspershareastherewasnopotentialordinarysharedilutionduringbothyears.

9. DIVIDENDS

2021 2020HK cents

per share HK$ millionHK cents

per share HK$ million

Dividendspaidandrecognisedas distributionduringtheyearForcurrentyear:—Interimdividends 16.0 1,600.0 12.0 1,200.0Forprioryear:—Finaldividends 12.0 1,200.0 20.0 2,000.0—Specialdividends – – 30.0 3,000.0

2,800.0 6,200.0

Subsequenttotheendofthereportingperiod,a finaldividendofHK24.0cents (2020:HK12.0cents)pershare,totallingHK$2,400.0million(2020:HK$1,200.0million)inrespectoftheyearended31March2021havebeenproposedbythedirectorsof theCompanyandaresubject toapprovalbytheshareholders intheforthcomingannualgeneralmeeting.

10. INVENTORIES


Rawmaterialsfor: Gem-set,PlatinumandK-goldjewellery 7,627.5 7,252.3 Goldjewelleryandproducts 3,017.5 2,114.6

10,645.0 9,366.9

Finishedgoods: Gem-set,PlatinumandK-goldjewellery 16,004.1 16,374.2 Goldjewelleryandproducts 14,376.9 14,963.6 Watches 1,765.5 1,638.7

32,146.5 32,976.5

Packagingmaterials 219.9 195.0

43,011.4 42,538.4

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11. TRADE AND OTHER RECEIVABLES

Included in tradeandother receivablesare tradereceivablesofHK$4,580.6million (2020:HK$2,744.8million)andtheagingbyinvoicedateisasfollows:


0to30days 4,380.6 2,206.831to90days 79.7 382.491to180days 22.2 54.2Over180days 98.1 101.4

4,580.6 2,744.8

12. TRADE AND OTHER PAYABLES

IncludedintradeandotherpayablesaretradepayablesofHK$819.4million(2020:HK$253.4million)andtheagingbyinvoicedateisasfollows:


0to30days 800.6 200.731to90days 12.0 36.991to180days 0.4 12.6Over180days 6.4 3.2

819.4 253.4

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MANAGEMENT DISCUSSION AND ANALYSIS

PERFORMANCE REVIEW

Overview

ThebusinessenvironmentwaschallenginginFY2021amidthepandemicandmacroeconomicuncertainties.Yet, theGroup’sbusinessmaintainedasteadyandhealthygrowth,drivenbyourretailexpansion inMainlandChinawithnetopeningsof746POSandasolidrecoverytherebackedbyanimprovingconsumersentimentandsoftenedgoldpricein2HFY2021.Ourstrategic stepson smart retail alsohelpedusachievebetter customerengagementandboostedoure-commerceandonline-to-offline(“O2O”)relatedsalesinMainlandChinaduringthefinancialyear.Ontheotherhand,businessinHongKong,Macauandothermarketswasstagnantasmajorbordercrossingsremainedclosed.

TheGroup’sadjustedgrossprofitmarginwasbenefittedduring1HFY2021asgoldpricesurged,yet,sucheffect faded in2HFY2021.CoupledwithahighersalescontributionfromwholesalebusinessinMainlandChinaandalessfavourableproductmix,adjustedgrossprofitmargindeclinedyear-on-yearduring the financial year.Nevertheless, thanks toourwellcontainedSG&A,operating leverageandgovernment subsidiesand reliefsgranted, theGroup’scoreoperatingprofitincreasedby51.7%year-on-yearinFY2021.

WiththeCOVID-19relatedrentconcession,unrealisedgainongold loansaswellas foreignexchange gain, netting off impairment on assets and goodwill, profit attributable toshareholderswaselevatedby107.7%comparedtothe lowbase inFY2020whilecomparingtoFY2019,itroseby31.3%onatwo-yearbasis.

Revenue

Revenue by reportable segmentFortheyearended31March(HK$million)

0

10,000

20,000

30,000

40,000

50,000

60,000

80,000

70,000

2017

28.2%

71.8%

36.3%

63.7%

37.8%

62.2%

39.5%

60.5%

51,246

59,156

66,661

56,751

70,164

14.9%

85.1% 46.5%

2018 2019 2020 2021

23.6%

34.5%

YoY change

Mainland China

Hong Kong, Macau and other markets

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Revenue (HK$ million) 1HFY2020 2HFY2020 1HFY2021 2HFY2021

1HFYYoY

change

2HFYYoY

change

MainlandChina 20,224 20,539 21,216 38,482 4.9% 87.4%HongKong,Macauand othermarkets

9,309 6,679 3,457 7,009 62.9% 4.9%

Overall 29,533 27,218 24,673 45,491 16.5% 67.1%

• TheGroup’srevenuewasupby23.6%toHK$70,164million inFY2021.VersusFY2019,revenuewasupby5.3%onatwo-yearbasis.

• RevenuefromMainlandChinajumped46.5%duringthefinancialyear,supportedbynewopenings, improvingconsumersentimentandasoftenedgoldpricein2HFY2021aswellasa lowbaseofcomparison. ItscontributiontotheGroup’srevenuewas85.1% inthefinancialyear.

• InHongKong,Macauandothermarkets, revenueshrank34.5%year-on-yearas thechallengingmacros, pandemic and closureofmajor border crossingsweighedonconsumerspending.

Revenue by product(1) (excluding jewellery trading and service income from franchisees)Fortheyearended31March(HK$million)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

20175.7% 6.0% 5.5% 6.1%

68.2%

7.7%

24.1%

50,821

57,892

65,966

56,250

69,289

2018 2019 2020 2021

23.2%

8.4%

26.3%

55.4%

62.4%64.1%

66.1%66.5%

27.4%

28.3%

30.0%

31.8%

YoY change

Gem-set, Platinum and K-gold jewellery

Gold jewellery and products

Watches

% of Revenue 1HFY2020 2HFY2020 1HFY2021 2HFY2021

Gem-set,PlatinumandK-goldjewellery 29.1% 25.5% 30.1% 20.9%Goldjewelleryandproducts 64.5% 68.7% 60.9% 72.2%Watches 6.4% 5.7% 9.0% 6.9%

• Revenueof gold jewellery andproductswasupby26.3% in FY2021.Despite thatinternationalgoldpricehikedeterred retaildemandduring1HFY2021, salesof thisproductcategory reboundedandgrewat74.9% in2HFY2021. Its contribution to theGroup’s revenueexpanded170basispoints to68.2% in the financialyear.Within theproductcategory,contributionoffixedpricegoldproductswas9.1%(FY2020:10.9%).

17

• Watchesalso registereda strong revenuegrowthof55.4% in FY2021, fuelledbyabuoyantdomesticdemandinMainlandChinaamidtheinternationaltravelrestrictions.

(1) Starting from FY2021, we re-classify our products into 3 categories namely gem-set, platinum and k-gold jewellery, gold jewellery and products, and watches, which the Company believes is appropriate in reflecting its performance

Same Store Sales Growth (“SSSG”)

SSSG by major market

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

10.5%

-10.9%

-42.3% -35.0%

-65.0%-75.5%

-52.5%-31.0%

31.2%

-6.8%

2.3%

-11.2%

11.0%

141.2%

-49.5%

12.2%

FY2020 FY2021

Mainland China

Hong Kong and Macau

FY2020 FY2021

SSSG SSSGSSS volume

growth MainlandChina 15.1% 31.9% 8.2%HongKongandMacau 38.7% 41.3% 42.9%

• InMainlandChina,SSSrevivedandturnedpositivein2QFY2021amidaneasingpandemicsituation there.Coupledwith the resilientdemandandanexceptionally lowbaseofcomparison,SSSGacceleratedto141.2%in4QFY2021.Asaresult,SSSinMainlandChinaincreasedby31.9%duringFY2021.

• InHongKongandMacau,amutedcustomer traffic led toa41.3%drop inSSSduringFY2021.Yet,SSSrose31.2%in4QFY2021attributabletoarecoveryoflocalconsumption.

18

Profitability

Group Core operating profit(2) by reportable segmentFortheyearended31March Fortheyearended31March

(HK$million)

2019 2020 2021

27.9%

18.0%

10.5% 10.0%12.3%

20.4%

16.9%

29.6%28.2%

Adjusted gross pro�t margin(1)

Selling and distribution costs and general and administrative expenses(”SG&A”) as a % to revenue

Core operating pro�t margin(2)

2019

2H: 2,942

5,004

1,968

1H: 2,062 2H: 1,042

1H: 9260

2,000

4,000

6,000

8,000

10,000

2021

8,226

4042H: 376

1H: 28

2H: 4,176

1H: 4,050

2020

5,096

591

1H: 6852H: (94)

2H: 2,253

1H: 2,843

Mainland China (2HFY)

Mainland China (1HFY)

Hong Kong, Macau and other markets (2HFY)

Hong Kong, Macau and other markets (1HFY)

(1) Adjusted gross profit and the corresponding margin, a non-IFRS measure, eliminates the effect of unrealised loss (gain) on gold loans, which the Company believes is useful in gaining a more complete understanding of its operational performance and the underlying trend of its businesses

(2) Core operating profit and the corresponding margin, a non-IFRS measure, being the aggregate of adjusted gross profit and other income, less SG&A, which the Company believes is useful in gaining a more complete understanding of its operational performance and the underlying trend of its businesses

(HK$ million) 1HFY2020 2HFY2020 1HFY2021 2HFY20211HFY

YoY change2HFY

YoY change Revenue 29,533 27,218 24,673 45,491 16.5% 67.1%Adjustedgrossprofit 9,064 7,743 8,660 11,127 4.5% 43.7% Adjusted gross profit margin 30.7% 28.4% 35.1% 24.5% 4.4% pts 3.9% pts

Otherincome 213 224 347 345 62.7% 54.4%SG&A (5,750) (5,807) (4,928) (6,921) 14.3% 19.2% SG&A as a % to revenue 19.5% 21.3% 20.0% 15.2% 0.5% pts 6.1% pts

Coreoperatingprofit 3,527 2,160 4,078 4,552 15.6% 110.8% Core operating profit margin 11.9% 7.9% 16.5% 10.0% 4.6% pts 2.1% pts

• Adjustedgrossprofitmargindecreasedby140basispoints inFY2021,mainlyduetoahigher sales contribution fromwholesalebusiness,gold jewelleryandproductsandwatchesinretailbusinessascomparedwithFY2020.

• Nevertheless, coreoperatingprofitmargin increased to12.3%, thanks toourwellcontainedSG&Aandoperating leverage. InFY2021, theGroup’scoreoperatingprofitincreasedby51.7%year-on-year.

19

• Amongthetwosegments,MainlandChinacontinuedtobeourmainprofitcontributorandaccounted forover95%of theGroup’scoreoperatingprofit inFY2021. Its coreoperatingprofitrecordedarobustgrowthof61.4%duringthefinancialyear.

• On theotherhand, coreoperatingprofit ofHongKong,Macauandothermarketsregistereda31.7%decline inFY2021,yet ithasdemonstrateda recovery trendsince1HFY2021.

• Profitattributable toshareholders increasedby107.7% inFY2021,mainlybenefittedfromone-off rentconcession,unrealisedgainongold loansplus foreignexchangegain,nettingoffimpairmentonassetsandgoodwill.ComparingtoFY2019,itroseby31.3%onatwo-yearbasis.

Adjusted gross profit margin

• Weuseadjustedgrossprofitmargin,anon-IFRSmeasure,foranalysis,whichrepresentsgrossprofitmargingeneratedfromthebusinessaftereliminatingtheeffectofunrealisedloss (gain) on gold loans, because thismeasure better reflects the operationalperformanceof theGroupand isuseful forunderstanding theunderlying trendof itsbusinesses.

Unrealised loss (gain)

For the year ended 31 March 2019 2020 2021

Grossprofitmargin 27.9% 28.4% 28.6%Unrealisedloss(gain)ongoldloans 0.0% 1.2% (0.4)%Adjustedgrossprofitmargin 27.9% 29.6% 28.2%

• Weusegold loans (shortposition ingold) foreconomichedgepurposetomitigatethefinancialimpactofthegoldpricefluctuationsinourgoldinventories(longposition).Thelong-termeffectof longandshortpositions ingold isexpectedtonetouteachotherthroughthesalesofgold inventories.However,whenwetakeasnapshotposition,ashort-termtimingdifferencemayarise.Theunsettledgoldloancontractsarerevaluedatmarketpriceat theendof the reportingperiod,while thegold inventoriesarenotrevaluedas it ismeasuredatweightedaveragecost,unlessan impairment indicatorexists.

• Asat31March2021, therewasanunrealisedgainofHK$288millionarising fromsuchtimingdifference.

20

Movements in adjusted gross profit marginFortheyearended31March

25.0%

27.0%

29.0%

31.0%

33.0%

2020 2021

29.6%

1.0% 28.2%

1.8%

0.2%

0.8%

Changes in gross pro�t marginby product in retail business

Changes in product mixin retail business

Impact from wholesale business

Changes in Mainland China, Hong Kong, Macau and other markets mix

• Atgrouplevel,FY2021adjustedgrossprofitmargincontractedby140basispointsyear-on-year.

• Thehighercontribution fromourwholesalebusinessandgold jewelleryandproductsandwatches inretailbusiness ledtothecontractionofgrossprofitmarginwhichwaspartiallyoffsetbythefavourablemarketmixwithpromisinggrowthinMainlandChina.

London gold price

1,100

1,300

1,500

1,700

1,900

2,100

2,300

1.4.2019 1.4.2020 31.3.2021

(US$ per ounce)

London gold price

Average of T-180 days(1)

(1) Average of T-180 days refers to the average gold price of previous 180 days on rolling basis, being a proxy of the average price of our hedged inventories. Average of T-180 days was used for FY2020 and FY2021

Londongold price

FY2021 Closing price YoY change Average price YoY change

5.1% 24.6%

21

SG&A

SG&A by reportable segmentFortheyearended31March(HK$million)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

17.0%

2.5%

25.4%37.7%

62.3%

12,025

34.1%

65.9%

11,557

24.8%

75.2%

11,849

2019 2020 2021

YoY change

Mainland China


SG&A to revenue ratioFortheyearended31March(HK$million)

18.0%

16.9%

20.4%

8.0%

2.8%

2.7%

1.2%1.6%

1.0%

2.9%

11,55711,849

1.7%

25.6%

15.4%

6.5%15.4%

2.5%

1.1%

5.4%0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2020

6.9%

2.9%

2.3%

1.3%1.1%0.7%

2.9%

12,025

2019 2021

1.4%

1.9%

6.6%

2.8%

0.8%0.8%

2.5%

Staff costs and related expenses

Concessionaire fees

Rental expenses

Depreciation and amortisation (Right-of-use assets, “ROUA”)

Depreciation and amortisation (Property, plant and equipment)

Advertising and promotion expenses

Packaging materials

Other SG&A(1)

As a % of revenueYoY change

(1) Other SG&A mainly represented bank charges incurred for sales transactions settlement, royalty fees for the sales of licensed products, certificate expenses and utilities

• SG&Aexpenseswaswellmanagedtobeincreasedby2.5%toHK$11,849million.

• SG&Aratiocontractedby350basispoints to16.9%duetooperating leverageandoureffectivecostcontrol. Inparticular,advertisingandpromotionexpenseswasdownby15.4%andpackagingmaterialswasalmostflatduringtheyear.

• Analysesof themajorSG&Acomponents, includingstaffcostsandrelatedexpenses,concessionairefeesandlease-relatedexpensesareprovidedonp.25to26and35to36ofthisannouncement.

22

MAINLAND CHINA

Revenue

Revenue by operation modelFortheyearended31March(HK$million)

0

10,000

20,000

30,000

40,000

70,000

60,000

50,000

33.3%

46.5%

71.7%40.2%

59.8%

71.7%

28.3%

65.7%

34.3%

42,432 40,763

59,698

21.6%

78.4%

31,019

76.3%

23.7%

36,804

2017 2018 2019 2020 2021

Retail

Wholesale

YoY change

• InMainland China, our retail revenue represents sales from self-operated POS,e-commerceandotherdirectchannels,whilewholesalerevenuemainlyrepresentssalestofranchiseesandprovisionofservicestofranchisees.

• RevenueinMainlandChinaleaped46.5%toHK$59,698millioninFY2021.Onaconstantexchangeratebasis,revenueroseby44.5%inthefinancialyear.

• Wholesalerevenuesoared71.7%duringthefinancialyear,boostedbynewopenings inlowertierandcounty levelcities. Its revenuecontributionclimbed590basispoints to40.2%inthefinancialyear.ShareofwholesalerevenueinMainlandChinawas36.3%and42.3%in1HFY2021and2HFY2021,respectively.

• Asat31March2021,wehad2,659 franchisedCHOWTAIFOOK JEWELLERYPOS.Formajorityof thesePOS,we retain inventoryownershipuntil sales transactions arecompletedwithretailconsumers,uponwhichwholesalerevenue is recognised.ThesePOScontributedapproximately64.1%ofthewholesalerevenueinMainlandChina.

23

SSSG

SSSG of major products

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

14.7%

3.0%

-3.0%

0.9% -49.2%

-6.6%

2.5% -5.2%

79.6%

-11.7%

2.5%

-19.8%

6.7%

159.8%

-51.0%

12.7%

FY2020 FY2021

Same Store ASP FY2021

Gem-set jewellery

HK$

7,000(FY2020(1): HK$6,500)


(FY2020(1): HK$4,100)

HK$

5,000



FY2021

SSSGSSS volume

growth

Gem-set,PlatinumandK-goldjewellery 11.2% 0.4%Goldjewelleryandproducts 35.3% 11.3%Watches 76.0% 21.8%

Overall 31.9% 8.2%

(1) Same Store average selling price (“ASP”) on FY2021 Same Store basis

• InMainlandChina,SameStoreASPcontinuedanupwardtrendinallproductcategoriesduringFY2021.

• Retaildemandforgold jewelleryandproductswassluggish in1HFY2021.Yet,asgoldpricesoftenedcoupledwithafavourableimpactfromtheappreciationofRMB,demandpickedup in2HFY2021.This ledtoaSSSGof35.3%for fullyear.ASPofgold jewelleryandproductssurgedfromHK$4,100 inFY2020toHK$5,000 inFY2021,mainlythankstothecontinualstrengthinCTF•HUÁCollection.

• SSSofgem-set,platinumandk-gold jewellerygrew11.2%during the financial year. Gem-setjewelleryASPwentupfromHK$6,500inFY2020toHK$7,000inFY2021.

• Watcheswitnessedaverystrongyearanddelivereda76.0%SSSGinFY2021,supportedbyabuoyantdomesticdemand.

24

Profitability

Mainland ChinaFortheyearended31March

2019 2020 2021

28.8%

17.6%

11.8%

30.5%

18.7%

12.5%

28.0%

14.9%

13.8%

SG&A as a % to revenue

Core operating pro�t margin

Adjusted gross pro�t margin

(HK$ million) 1HFY2020 2HFY2020 1HFY2021 2HFY2021

1HFY YoY

change

2HFY YoY

change Revenue 20,224 20,539 21,216 38,482 4.9% 87.4%Adjustedgrossprofit 6,445 5,988 7,343 9,368 13.9% 56.4% Adjusted gross profit margin 31.9% 29.2% 34.6% 24.3% 2.7% pts 4.9% pts


Coreoperatingprofit 2,843 2,253 4,050 4,176 42.5% 85.3% Core operating profit margin 14.1% 11.0% 19.1% 10.9% 5.0% pts 0.1% pts

• AdjustedgrossprofitmargininMainlandChinaexpandedby270basispointsto34.6%in1HFY2021as like-for-likegrossprofitmargin improved,especially ingold jewelleryandproducts.However, in2HFY2021,adjustedgrossprofitmargindecreasedby490basispoints to24.3%asa resultofhighercontributionofgold jewelleryandproductsandwatches inretailbusiness,decline ingrossprofitmargin ingold jewelleryandproductsandimpactfromwholesalebusiness.

• Yet,coreoperatingprofitmarginstayedatabout11%in2HFY2021,similarto2HFY2020level.

• Overall,adjustedgrossprofitmargincontractedby250basispointsto28.0%inFY2021asa resultofhigher sales contribution fromwholesalebusiness,gold jewelleryandproductsandwatchesinretailbusinessascomparedwithFY2020.

• SG&Aratiodecreasedby380basispointsto14.9%inFY2021,thankstoourcostsavings,reliefreceivedfromgovernmentonmajorexpenseitemandoperatingleverage.

• Full year coreoperatingprofitmarginexpandedby130basispoints year-on-year,demonstratingacontinuousimprovementacrossthepreviousthreefinancialyears.

25

SG&A


14.9%

18.7%

7.4%

3.9%

1.0%1.5%1.2%1.2%

2.4%

7,616

8,910

14.1%

25.7%

5.8%

3.3%

0.9%

0.8%1.1%

0.9%

2.1%

21.4%5.7%0.7%

17.0%

7.4%

29.9%

0

1,000

2,000

3,000

4,000

5,000

7,000

10,000

9,000

6,000

8,000

2020

6.7%

4.5%

0.8%1.3%1.0%0.9%

2.4%

7,487

2019 2021

17.6%


Concessionaire fees

Rental expenses

Depreciation and amortisation (ROUA)



Packaging materials

Other SG&A

As a % of respective revenueYoY change

Staff costs and related expensesFortheyearended31March(HK$million)

20,290 2.8%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

37.3%

59.1%

3.6%

37.3%

59.2%

3.5%

2,8523,028

7.4%

6.7%

5.8%

3,455

46.8%

49.8%

3.4% 12.9%

4.1%

43.0%

14.1%

20202019 2021

As a % of respective revenue

Variable staff costs

Fixed staff costs

Other staff related expenses(2)

Average number of employees(1)

YoY change

FY2021

YoY change

(1) Employees in production function excluded(2) Other staff related expenses mainly included staff messing, medical care, educational expenses, etc.

• Staffcostsandrelatedexpenseswereupby14.1%inFY2021.Incrementalexpensesweremainlyattributabletothe increase invariableperformancebasedportionwhichwas inlinewithbusinessgrowth.

• Fixedcostsdecreasedby4.1%duringthefinancialyearas therewasgovernmentreliefonthesocial insurancecontributionamountedtoapproximatelyHK$40millionduetotheCOVID-19situation.Inaddition,thecalculationbasisofemployercontributiononthesocialinsurancewasadjusteddownbythegovernmentascomparedtotheprioryear.

26

Concessionaire fees and lease-related expenses(1)

Fortheyearended31March(HK$million)

25.7%

20.0%15.8%

84.2%

22.0%

78.0%

2,031

21.3%

78.7%

2,528

0

500

3,000

2,500

2,000

1,500

1,000

20202019 2021

2,246

24.5%

4.8%

3.9% 4.1%

8.4%8.3%8.0%

Concessionaire fees

Lease-related expenses as a % of respective revenue

YoY change

Concessionaire fees as a % of respective revenue

Lease-related expenses(1)

• Concessionaire feesroseby25.7%asretail revenue increased.Theconcessionaire feesratiowasloweredto8.0%mainlyduetotheshiftofsalesmixtowardsgoldjewelleryandproductswhicharegenerallysubjecttolowerrates.

• Lease-relatedexpensesratioalsowentdownto4.1%asaresultofoperatingleverage.

(1) Under IFRS 16 — leases, depreciation and amortisation (ROUA) and finance costs on leases replace the majority of rental expenses and therefore we combined these three elements for the analysis of lease-related expenses

POS network

POS movement by store brand(1) — Mainland China

31.3.2019 31.3.2020 During FY2021 31.3.2021As at Total Total Addition Reduction Net Total CHOWTAIFOOKJEWELLERY(2) 2,807 3,429 833 (164) 669 4,098CTFWATCH 113 116 22 (10) 12 128HEARTSONFIRE 3 1 – – – 1ENZO – 59 25 (9) 16 75SOINLOVE 27 43 31 (8) 23 66MONOLOGUE 38 51 34 (8) 26 77

(1) Shop-in-Shop (“SIS”) and Counter-in-Shop (“CIS”) excluded(2) CTF WATCH POS excluded

27

RSV analysis

RSV by product

29.6%

65.1%

5.3%25.1%

68.4%

6.5%

RSV YoYchangeFY2020 FY2021

27.4%

57.7%84.0%

50.1%

Gold jewellery and productsWatches

Overall

Gem-set, Pla�num andK-gold jewellery

RSV by channel

89.2%

5.9%4.9%

88.5%

7.2%4.3%


49.0%83.4%30.9%

50.1%

CHOW TAI FOOK JEWELLERYOther store brands(1)

E-commerce(2)

Overall

(1) CTF WATCH, HEARTS ON FIRE, ENZO, SOINLOVE and MONOLOGUE included(2) Major platforms included Chow Tai Fook eShop, Tmall, JD.com, Vipshop; O2O distribution (i.e. routing online orders to POS for delivery

service), CloudSales 365 and Cloud Kiosk excluded

28

The following analyses focus on CHOWTAI FOOK JEWELLERY POSwhichcontributedapproximately90%oftheRSVinMainlandChina:

CHOW TAI FOOK JEWELLERY POS

RSV and POS by tier of cities(1)

11.9%

42.4%22.0%

23.7%

17.0%

48.4%18.3%

16.4%

% of POS % of RSV

FY2021RSV YoY

changeNet POS

movement

47.3% 52.7%

45.4%

54.1%

268 156

77

168

Tier II ci�esTier III ci�es

Tier I ci�es

Tier IV ci�es and others

(1) As an initiative to better reflect the economic development and strategic significance of cities in Mainland China, we adopt the city-tier ranking published by Yicai Global. New first-tier cities were grouped under Tier II cities in our analysis. Please refer to the ranking released on 29 May 2020

• InFY2021,weopenedanetof669CHOWTAIFOOKJEWELLERYPOSinMainlandChinaunderthecontinuousexecutionofourexpansionstrategy.ApproximatelyhalfoftheseopeningswerelocatedinTierIII,IVandothercities.

• Tier III, IVandothercitiesachievedstrongerRSVgrowththanTier Iand IIcitiesduringthefinancialyear,mainlydrivenbynewopenings.

RSV and POS by operation model

35.1%

64.9%

51.5%

48.5%

FY2021RSV YoY

changeNet POS

movement

26.6% 54Self-operated78.8%Franchised

% of POS % of RSV

723

• Byoperationmodel,allnetopenings inFY2021were in franchised format.Asat31March2021,approximately65%ofourPOSinMainlandChinawereinfranchisedformat.

• FranchisedPOSoutpacedself-operatedPOS inRSVgrowthandshared51.5%ofRSV inMainlandChinaduringFY2021,underpinned largelybynewopeningsoverthepasttwoyears.GrowthoffranchisedPOScalculatedonsamestorebasiswas32.8%inFY2021.

• Salesperstoreof franchisedPOSwasgenerally lower thanthatof self-operatedPOSlocatedinthesamecitytierduringthefinancialyear.

29

RSV and POS by store format

40.3%40.6%

19.2%

43.1%44.4%

12.5%

FY2021RSV YoY

changeNet POS

movement

12131.0%Department store84.9% 247Others

62.8% 301Shopping mall

% of POS % of RSV

• InFY2021,storesatstreet levelandshoppingmallscontinuedtohaveastrongerRSVgrowththanPOSindepartmentstores.

Self-operated CHOW TAI FOOK JEWELLERY POS

RSV per store by store age

0.0%

80.0%

60.0%

40.0%

20.0%

100.0%

120.0%

140.0%

60.8%

69.0%

84.3%

98.7%

119.4%

Less than 2 years(1) 2–4 years 4–6 years 6–8 years 8 years or more Total

FY2021 RSV per same store:HK$22.7 million(2)

POS opening date 4/2019–3/2021 4/2017–3/2019 4/2015–3/2017 4/2013–3/2015 3/2013or before

POS 115 292 205 177 650 1,439 % of POS 8.0% 20.3% 14.2% 12.3% 45.2% 100.0%

Ratio of annual RSV per store to RSV per Same Store(1) For POS of age less than 1 year, RSV is adjusted on an annualised basis(2) Value-added tax (“VAT”) included

30

Average quarterly sales(HK$million)

1Q 2Q 3Q 4Q

4.8

26.6%

4.1

17.8%

4.5

24.6%

4.7

20.3%

5.2

28.5%

5.6

24.0%

3.7

8.8

37.9%

20.3%

FY2021 quarterly SSS contributionto annual SSS

FY2020 quarterly SSS contribution to annual SSS(1)

FY2021 average quarterly SSS

FY2020 average quarterly SSS(1)

(1) SSS on FY2021 Same Store basis

• Asbusiness in1HFY2021wasstill recovering fromtheCOVID-19pandemic,averageSSScontributionin2HFY2021reachedapproximately62%offullyearSSS,slightlyhigherthanourseasonalityundernormalcourseofbusiness.

• 4Q,beingourpeakseasonasdrivenbyfestiveoccasionssuchasChineseNewYearandValentine’sDay,usuallyaccount for thehighestquarterlySSScontribution.However,withthepandemic,theSSScontributionfor4QFY2020wasreducedto20.3%,resultinginanabnormalseasonalitypattern.

E-commerce(1) and O2O related business(2)

RSV by product

24.2%

75.3%

0.4%

18.1%

81.5%

0.4%


43.0%

107.4%95.0%

91.8%

Gem-set, Pla�num andK-gold jewelleryGold jewellery and productsWatches

Overall

(1) Major platforms included Chow Tai Fook eShop, Tmall, JD.com, Vipshop(2) O2O distribution (i.e. routing online orders to POS for delivery service), CloudSales 365 and Cloud Kiosk included

31

E-commerce and O2O related business performanceFY2021

4.2%E-commerce

2.9%O2O related business

RSV

YoY change

91.8% of respective retail sales volume

14.7%(FY2020: 14.8%)

of respective RSV

7.1%(FY2020: 5.6%)

ASP

2,800HK$

(FY2020: HK$1,400)

E-commerce

1,700HK$

O2O related business

4,900HK$

• RSVofoure-commerceandO2Orelatedbusinessgrewstronglyat91.8% inFY2021,mainlyattributabletooursalesonO2Oplatforms.

• E-commerceandO2Orelatedbusinesscontributed7.1%totheRSV inMainlandChinaduringthefinancialyear, thankstoourprivatedomainsmartretailapplications.ASPoftheseapplicationswasthreetimesthatofthee-commerceplatformsastheyenabledacloserconnectionandastrongertrustwithourcustomers.

• Intermsofretailsalesvolume,shareofthee-commerceandO2OrelatedbusinesstotheMainlandChina’soperationsstayedsimilartopreviousfinancialyear.

32

HONG KONG, MACAU AND OTHER MARKETS

Revenue

Revenue by operation modelFortheyearended31March(HK$million)

0

5,000

10,000

15,000

20,000

25,000

30,000

2017

4.6% 7.7% 4.8% 12.8%

87.2%

95.2%92.3%95.4%

20,22622,352

24,229

10,466

7.0%

93.0%

15,988

2018 2019 2020 2021

34.5%

38.7%

20.7%

YoY change

Retail

Wholesale

• InHongKong,Macauandothermarkets,ourretail revenuerepresentssalesfromself-operatedPOS,e-commerceandotherdirectchannels,whilewholesalerevenuerepresentssalestofranchisees,salestoretailersandsalesfromjewellerytrading.

• Retailrevenuedeclinedby38.7%inFY2021ascustomertrafficremainedsubdued.

33

SSSG

SSSG of major products

-11.6%

-15.2%

-47.8%

-37.1%-26.8%

-56.1%-66.8%

-82.9%

-65.7%

-64.5%

-37.0%

-50.7%

14.0%7.0%

62.8%

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

-66.2%

FY2020 FY2021

Same Store ASP FY2021

Gem-set jewellery

HK$

15,600(FY2020(1): HK$11,300)


(FY2020(1): HK$6,800)

HK$

5,500



FY2021

SSSG

SSS volume growth

Gem-set,PlatinumandK-goldjewellery 19.3% 38.7%Goldjewelleryandproducts 55.7% 45.0%Watches 7.6% 20.0% Overall 41.3% 42.9% (1) Same Store ASP on FY2021 Same Store basis

• SSSof gold jewelleryandproductswentdownbyabout56% inFY2021.ASPof theproductcategoryreducedfromHK$6,800 inFY2020toHK$5,500assalesmixof fixedpricegoldproductsincreased.

• Despite thechallengingbusinessenvironment,SSSGofgem-set,platinumandk-goldjewellerywasbacktoapositivelevelsince3QFY2021,thankstoourpromotionalefforts.Thissuccessfullyattractedbig ticket transactions, leadingto38.7% increase inASPofgem-setjewelleryduringthefinancialyear.

34

Profitability

Hong Kong, Macau and other marketsFortheyearended31March

26.3%

18.7%

8.1%

27.4%

24.7%

3.7%

29.4%

28.1%

3.9%

2019 2020 2021

SG&A as a % to revenue

Core operating pro�t margin

Adjusted gross pro�t margin

(HK$ million) 1HFY2020 2HFY2020 1HFY2021 2HFY20211HFY

YoY change2HFY

YoY change

Revenue 9,309 6,679 3,457 7,009 62.9% 4.9%Adjustedgrossprofit 2,619 1,756 1,316 1,760 49.7% 0.2% Adjusted gross profit margin 28.1% 26.3% 38.1% 25.1% 10.0% pts 1.2% pts


Coreoperatingprofit 685 (94) 28 376 95.9% N/A Core operating profit margin 7.4% (1.4)% 0.8% 5.4% 6.6% pts N/A

• In1HFY2021,adjustedgrossprofitmarginimprovedsignificantlyby1,000basispointsto38.1%,drivenlargelybythesurgeingoldpriceandsomeimprovementingrossprofitmarginofourjewellerytradingbusiness.In2HFY2021,adjustedgrossprofitmargindecreasedfrom26.3%to25.1%duetoimpactfromwholesalebusinesswhichwaspartiallyoffsetbylike-for-likemarginimprovementandamorefavourableproductmixinretailbusiness.

• Asaresult,inFY2021,adjustedgrossprofitmarginexpandedby200basispointsto29.4%.

• SG&Aratioincreasedby340basispointsto28.1%inthefinancialyearduetooperatingdeleverageespecially in1HFY2021,yet thankstoeffectivecostcontrol,SG&Aratiowasbackto21.4%in2HFY2021.

• Coreoperatingprofitdroppedsignificantlyby31.7% inFY2021.Yet,acoreoperatingprofit ofHK$376millionwas recorded in 2HFY2021, demonstrating a sequentialimprovementfrom2HFY2020and1HFY2021.Itscorrespondingmarginwasslightlyupby20basispoints to3.9%during the financial year,benefitted from thegovernmentsubsidiesreceivedwhichwerecordedasotherincome.

35

SG&A


0

1,000

2,000

3,000

4,000

5,000

4.5%0.3%1.1%3.2%

7.6%

0.0%

11.3%

3.8%

0.3%1.1%1.2%

5.0%

0.1%

7.3%

4.2%0.4%1.4%1.9%

7.1%

0.0%

9.6%

4,538

2,938

3,941

2019 2020 2021

22.7%

78.6%

29.3%

8.0%49.2%

25.4%

47.5%30.4%

18.7%

28.1%24.7%




Concessionaire fees

Rental expenses

Packaging materials

Other SG&A



YoY change

Hong Kong and Macau

Staff costs and related expensesFortheyearended31March(HK$million)

3,050 5.3%9.2%

6.9%

11.8%

1,551

40.8%

52.4%

6.8%

34.8%

58.2%

7.0%

31.8%

61.3%

6.9%

1,328

1,048

16.9%

27.8%

21.1%

22.5%

20202019 20210

500

1,000

1,500

2,000


Other staff related expenses(2)

Fixed staff costs

Variable staff costs

Average number of employees(1)

YoY change

FY2021

YoY change

(1) Employees in production function excluded(2) Other staff related expenses mainly included staff messing, medical care, educational expenses, etc.

• Staffcostsandrelatedexpenseswasdownby21.1%.Thevariablestaffcostsshrankby27.8%year-on-yearinFY2021,largelyinlinewiththedropinrevenue.

• Fixedstaffcostsalsodeclinedby16.9%duetoattritionandreductiononcertainallowances.

• DuringFY2021,wereceivedHK$160million fromEmploymentSupportSchemewhichwasrecognisedinotherincome.

36

Lease-related expenses(3)

Fortheyearended31March(HK$million)

0

500

1,500

1,000

7.3%

4.9%

8.3%

3.3%

16.6%

80.1%

3.9%

8.5%

87.6%

31.2%

20202019 2021

1,146 1,126

774As a % of respective revenue

Finance costs on leases


Rental expenses

YoY change

(3) Under IFRS 16 — leases, depreciation and amortisation (ROUA) and finance costs on leases replace the majority of rental expenses and therefore we combined these three elements for the analysis of lease-related expenses

• Lease-relatedexpensesfellby31.2%duetoconsolidationofPOSandrentalrenewalreduction.Yetitscorrespondingexpensesratioexpandedby100basispointsto8.3%inFY2021duetooperatingdeleverage.TheaveragereductiononleaserenewalduringFY2021relativetothelastleaseswasaround40%.

• DuringFY2021,COVID-19-relatedrentconcessionofHK$128millionwasrecognised inothergains.

POS networkPOS movement by store brand(1) — Hong Kong, Macau and other markets

31.3.2019 31.3.2020 During FY2021 31.3.2021As at Total Total Addition Reduction Net Total

CHOWTAIFOOKJEWELLERY 131 138 8 (12) (4) 134 HongKong,China 81 83 3 (7) (4) 79 Macau,China 19 18 1 (1) – 18 Othermarkets 31 37 4 (4) – 37HEARTSONFIRE 15 10 1 (3) (2) 8SOINLOVE – 1 – – – 1MONOLOGUE – 2 1 – 1 3

(1) SIS and CIS excluded

37

RSV analysis


RSV by product

24.6%

61.5%

7.2%

28.8%

68.3%

9.7%


21.0%

39.3%8.6%

32.6%

Gem-set, Pla�num andK-gold jewelleryGold jewellery and productsWatches

Overall

RSV and POS by geography

56.2%12.3%

31.5%

77.5%

13.9%

8.6%

% of POS % of RSV

FY2021RSV YoY

changeNet POS

movement

Hong Kong 30.9% 5Macau 47.7% –

9.6% –Other markets

• InFY2021,RSVrecordeda32.6%declineinHongKong,Macauandothermarketsasthepandemicsweighedoninternationaltravelandtouristrelatedconsumption.

• CustomertrafficatPOSinHongKongandMacaudroppedby40.3%year-on-yearduringthe financialyear.Whereas thepercentageofRSVsettledbyChinaUnionPay,Alipay,WeChatPayorRMBtothetotalRSVofHongKongandMacaumarketdroppedto18.2%inFY2021from36.9%inFY2020.

• InHongKong,weconsolidatedourretailnetworkandclosedanetof5POS inFY2021,mainlyintouristicareassuchasTsimShaTsuiandCausewayBay.

• Inothermarkets,weopened5dutyfreePOSinHainan,MainlandChinaandclosedanetof5POS inother locations.RSVdecline inothermarketswassofter thanthat inHongKongandMacau,thankstotherobustperformanceofdutyfreePOSinHainan.

38

Hong Kong and Macau

Average quarterly sales(HK$million)

11.4

16.0

28.0%

26.7 26.8

33.1%

45.7

33.1%

33.3

24.1%

19.8%

38.7

33.0%

20.4

14.7%

1Q 2Q 3Q 4Q

14.1%

FY2021 quarterly SSScontribution to annual SSS

FY2020 quarterly SSScontribution to annual SSS(1)

FY2021 average quarterly SSS

FY2020 average quarterly SSS(1)

(1) SSS on FY2021 Same Store basis

• 3Q,beingthepeakseasonfortheindustryasdrivenbyChristmas,usuallyaccountedforthehighestquarterlySSScontributionandaverageSSSforourHongKongandMacaumarket.

• Nevertheless,seasonalityinbothFY2021andFY2020deviatedfromthatunderournormalcourseofbusiness.The lingeringpandemicseverelyaffectedourbusiness in1HFY2021whereasourpromotionaleffortshelpedboostsalesin2HFY2021,liftingSSScontributionof2HFY2021to66.1%offullyearSSS.

• While the situation inHongKong since2QFY2020and theoutbreakofpandemic in4QFY2020heavilyweighedonourbusinessperformance,quarterlySSScontributionskewedtowardsthefirstquarterduringFY2020.

39

OTHER FINANCIAL REVIEW

Other income, other gains and losses and other expenses

2019 2020 2021For the year ended 31 March HK$million HK$million HK$ million YoY change

Otherincome 396 437 692 58.4%Othergainsandlosses (276) (147) 431 N/AOtherexpenses (57) (146) (664) 353.9%

• OtherincomemainlyarosefromthegovernmentgrantsreceivedinMainlandChinaandHongKong, commission income,other income received from franchiseesandotherinterestincome.InFY2021,approximately34%ofotherincomewereone-offinnature.

• OthergainsandlossesmainlyrepresentedanetforeignexchangegainofHK$336million(FY2020: lossHK$234million)dueto theappreciationofRMB,COVID-19-relatedrentconcessionofHK$128million(FY2020:HK$16million)andgainonsurrenderofROUAofHK$2million(FY2020:HK$79million).

• Otherexpensesmainlyrepresentedtheassetsimpairment(includingproperty,plantandequipment and ROUA) of HK$382mill ion (FY2020: HK$63mill ion), the goodwillimpairmentofHK$232million (FY2020:HK$26million)andtheamortisationofotherintangibleassetsofapproximatelyHK$40million (FY2020:HK$36million)arising fromthe acquisition ofHeartsOn Fire Company, LLC several years ago.Wedecided arepositioningonHEARTSONFIREsoastomaintaintheidentityandheritageofthebrandwhilebetterservetheneedforustopenetrateintothehigh-endsegment.

Interest income, finance costs and taxation

2019 2020 2021For the year ended 31 March HK$million HK$million HK$ million YoY change

Interestincomefrombanks 83 78 82 4.5%Financecostsonbankborrowings (209) (284) (132) 53.7%Financecostsongoldloans (161) (207) (197) 4.6%Financecostsonleaseliabilities – (69) (48) 30.8%Taxation (1,668) (1,221) (2,219) 81.6%

• Financecostsonbankborrowingsdecreasedby53.7%,mainlyduetoarelatively loweraveragebankborrowinginterestrateandbankborrowingbalanceduringFY2021.

• Effectivetaxratedecreasedfrom29.0%inFY2020to26.4%inFY2021astheprofitabilityofHongKong,Macauandothermarketssegment,whichissubjecttorelativelylowertaxrates,improvedinFY2021.

40

Return on equity

• Weusereturnonequity (“ROE”) tomeasuretheefficiencyofgeneratingprofits fromeachunitofshareholderequity.

• Netprofitmarginincreasedto8.8%.ROEwasupby850basispointsto19.6%whiletheequitymultiplierdecreased.

Net profit

Revenue

Revenue

Total assets

Total assets

Total equity

ROE 19.6%Net profit

Total equity

8.5% pts(FY2020: 11.1%)

8.8%Net profit margin

(FY2020: 5.3%)

1.1 times 2.0 times

Assets turnover

(FY2020: 0.9 times)

Equity multiplier

(FY2020: 2.4 times)

Inventory balances and turnover period

Inventory balances by product(1)

Asat31March(HK$million)

0

10,000

5,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

1.9%

0.0%

7.7%

36.7%

4.3%

59.1%

39,327

3.9%

40.3%

55.8%

42,343

4.1%

40.6%

55.2%

42,792

2019 2020 2021

1.1%

YoY change


Watches


(1) Packaging materials excluded

41

Inventory turnover period by category(2)

Fortheyearended31March(Day)

0

100

50

150

200

250

300

350

400

450

60

239

299

84

297

381

78

234

312

2019 2020 2021

YoY change

69 days

63 days

6 days

Finished goods

Raw materials

(2) Being inventory balances, excluding packaging materials, at the end of the reporting period divided by cost of goods sold for the year, multiplied by 365 or 366

• Inventorybalances, excludingpackagingmaterials, increasedby1.1%and reachedHK$42,792millionasat31March2021.

• Inventoryturnoverperiodshortenedby69dayswhencomparedtothatofFY2020.

• Asat31March2021,approximatelyHK$7,280millionor16.9%ofour total inventorybalanceswereheldby franchisedPOS(31March2020:approximatelyHK$5,440millionor12.8%wereheldbyfranchisedPOS).

• Iftheinventorybalancesheldbyfranchiseeswereexcluded,inventoryturnoverperiodinFY2021wouldreduceto259days(FY2020:322days).

42

Capital structure

As at31.3.2020

HK$million%to

totalequity31.3.2021

HK$ million% to

total equity

Increase(decrease)

HK$ millionDenominated

currency(1)Interest rate

structure(1)

Non-currentassets 10,038 37.2% 9,065 28.7% (973) N/A N/A

Inventories 42,538 157.6% 43,011 136.3% 473 N/A N/A

Cashandcash equivalents(2)

7,219 26.7% 6,032 19.1% (1,187) MainlyHKD,RMBandUSD

Mainlyvariableinterest

rate

Totalborrowings(3) 22,711 84.1% 12,143 38.5% (10,568) Bankborrowings 11,431 42.3% 6,418 20.3% (5,013) HKD Variable

interestrate

Goldloans 11,280 41.8% 5,725 18.2% (5,555) RMBandUSD

Fixedinterest

rate

Netdebt(4) 15,492 57.4% 6,111 19.4% (9,381) N/A N/A

Workingcapital(5) 19,579 72.5% 26,101 82.7% 6,522 N/A N/A

Totalequity 26,991 100.0% 31,568 100.0% 4,577 N/A N/A

(1) Information about denominated currency and interest rate structure related to the condition as at 31 March 2021(2) Bank balances and cash included(3) As at 31 March 2021, bank borrowings amounted to HK$4,619 million and all the gold loans would be matured within 12 months while

bank borrowings amounted to HK$1,799 million would be matured in more than 1 year but not exceeding 2 years(4) Aggregate of bank borrowings, gold loans, net of cash and cash equivalents(5) Being net current assets

• Weprincipallymeetourworkingcapitalandother liquidity requirements throughacombinationof capital contributions, including cash flows fromoperations, bankborrowingsandgold loans.Gold loansarealsoused foreconomichedgepurpose tomitigatethefinancialimpactofthepricefluctuationsintheGroup’sgoldinventories.

• TheGroup’sdailyoperationwasmainlyfinancedbyoperatingcashflows,andmainlyreliedonshort-termborrowings to satisfy inventory financingneedsduringpeak seasons,workingcapital for futureexpansionplansandunexpectedneeds.TheGrouphasnotexperiencedanydifficultiesinrepayingitsborrowings.

• TheGroup’s incomeandexpenditureweremostlydenominated inHKDandRMB,whileitsassetsand liabilitiesweremostlydenominated inHKD,RMBandUSD.Nohedginginstrument is deployedagainstRMB fluctuation asmostof thedaily receipts andpayments forourMainlandoperationsarebothmade inRMB,whichdonotposeasubstantivecurrencyexposuretoourbusiness.

43

• It isour treasurypolicy tomaintainhigh liquidity in response to the requirementofoperating cash flows; and toupkeep financial prudencebynot engaging inhighlyleveragedorspeculativederivativeproducts.

Effect of RMB fluctuation

• AspartofourbusinessoperationisinMainlandChina,thefluctuationinRMBwouldpostsomeimpactonourperformance.

• TransactionsenteredbytheHongKongentitiesbutdenominated inRMB, includingtheinter-grouptransactionswiththeMainlandChinasubsidiaries,areconverted intoHKD,the functional currency of theGroup, initially using the spot rate at the date oftransactionandtheunsettledtransactionsareretranslatedatclosingexchangerateatthebalancesheetdate.Suchtranslationdifferencesbetweenthespotrateandclosingexchangeratearerecognisedinprofitorloss,negativelyaffectingourprofitfortheyearwhenRMBdepreciated.

• Exchangedifferencealsoariseswhen i) incomesandexpensesof theMainlandChinasegmentaretranslatedintoHKD,thepresentationcurrencyoftheGroup,attheaverageexchangerate,while thecorrespondingassetsand liabilitiesare translatedatclosingexchangerateandii)changeinclosingexchangeratesatthecurrentfinancialyearofthenetassetsoftheMainlandChinasegmentfromtheclosingratesatthepreviousfinancialyear.Suchdifferencesarerecognisedinthetranslationreserveinequity.

• The tablebelow illustrates the fluctuationofRMBand the impactonour financialperformance:

RMB to HKD

FY2021 Closing exchange rate YoY change Average exchange rate YoY change

8.1% 1.4%

2020 2021

For the year ended 31 March Asreported

Constantexchangeratebasis As reported

Constantexchangerate basis

RevenueYoYchange 14.9% 12.4% 23.6% 22.2%CoreoperatingprofitYoYchange 18.4% 15.5% 51.7% 49.8%Changesininventorybalances 7.7% 11.4% 1.1% 3.6%Changesincashandcashequivalents 5.5% 3.4% 16.4% 20.1%

44

Cash flows and others

Cash flows

2019 2020 2021For the year ended 31 March HK$million HK$million HK$ million

Operatingcashflowsbeforemovements inworkingcapital

7,774 9,912 11,572

Leasespaid(1) – (1,263) (1,182)Netcashusedininventories(2) (2,911) (3,427) (4,669)Netcashfromotheroperatingactivities 629 959 1,764Capitalexpenditure (1,392) (973) (839)

Pro forma free cash flows 4,100 5,208 6,646Netchangeinbankborrowings 2,133 1,362 (5,016)Dividendspaid (6,081) (6,243) (2,853)Othermovements (455) (749) 36

Net decrease in cash and cash equivalents (303) (422) (1,187)

Major cash flows items for FY2021(HK$million)

0

4,000

2,000

8,000

6,000

10,000

12,000

14,000

7,219

36

5,016

2,853

11,572

1,764

8394,669

1,182

6,032

20,000

18,000

16,000

6,646

Pro forma free cash �ows

Leases paid(1)

Operating cash �ows beforemovements in working capital

Net cash used in inventories(2)

Net cash from other operating activities

Capital expenditure

Net decrease in bank borrowings

Dividends paid

Other movementsAs at

31.3.2020As at

31.3.2021

(1) With adoption of IFRS 16, leases paid was included in financing activities(2) Net cash used in inventories included net change in inventories and repayment of gold loans

45

Capital expenditure

• TheGroup’scapitalexpenditure incurredduringFY2021amountedtoHK$839million(FY2020:HK$973million).

Capital expenditure by natureFortheyearended31March(HK$million)

0

500

1,000

1,500

3.4%8.6%

88.0%

4.6%

28.6%

66.8%

1,392

973

4.8%7.2%

88.0%

839

2019 2020 2021

Furniture, �xtures and equipment and leasehold improvements

Land and buildings and construction in progress

Plant and machinery and motor vehicles

Capital expenditure by functionFortheyearended31March(HK$million)

7.5%

6.5%

72.3%

13.7%

15.5%2.3%

73.9%

8.1%

7.9%9.2%

76.3%

6.7%

0

500

1,000

1,5001,392

973

839

2019 2020 2021

POS

Projects

Productions

Of�ces

46

CORPORATE STRATEGIESFY2021 isayearfullofunprecedentedchallengesaswellasunparalleledopportunities.TheoutbreakofCOVID-19acceleratedthepaceofdigitalisationatall levelsgloballyandalteredconsumers’buyinghabitsfundamentally.Webelievethatphysicalstoresandonlineplatformsshould still co-exist to create greater synergy for amore complete andmulti-facetedexperienceforcustomers.

Witha solid foundation thathasalreadybeenbuilt throughour“Smart+2020”strategicframework,which emphasised retail experience enhancement through technologicalinnovations,wearepleasedtomoveforwardwithourDual-ForceStrategy.OurDual-ForceStrategywill steerus towards the continualexpansionofphysical footprintanddigitalempowerment inordertocontinuedeliveringexceptionalcustomerexperiencethatcreateslong-termbranddifferentiationandloyalty.

MARKET REVIEW

Mainland China

• With theadoptionofeffectivepublichealthmeasures,China isoneof theearliestcountriestorecoverfromtheimpactsofCOVID-19.

• AccordingtotheNationalBureauofStatisticsofChina,thetotalretailsalesofconsumergoodsdecreasedby3.9%year-on-year in2020,whiletheretail salesofgold,silverandjewelleryalsodecreasedby4.7%.Yet, therehavebeensignsof improvement inthesecategories sinceAugust 2020. In the first 3monthsof 2021, a strong growthwasrecordedinbothretailsalesfiguresduetothelowbaselinefor2020.Anincrementwasalsorecordedascomparedtothesameperiodin2019.

• Againstthebackgroundof“dualcirculation”strategy,thedirectivesofthe14thFive-YearPlan,andinparticular,theguidanceof“stimulationofconsumptioninallsectors”intheFive-YearPlan,weexpectthatsalesintheconsumermarketinMainlandChinawillsurgerapidlyincomingyears.

• Developmentsinlowertiercitiesandruralareasareexpectedtopresenthugepotentialasgovernmentpoliciesandinfrastructureimprovementswillfavourtheirgrowth.

• Consumptionupgradeisthekeydriverofgrowth,andalternativeconsumptionpatternssuchas livestreamingandonlinesocialnetworkingareexpectedtogrowfast.Drivenbythenewduty-free retail strategy inChina,duty-freeshoppingwill also thrive in thecomingyears.

• With favourable fundamentals includingurbanisation, thegrowthofmiddleandupperclasses,andthesupportofgovernmentpolicies, theretailand jewellerymarketsareexpectedtocontinuetogrowinthecomingyears.


• TheclosureofmajorbordercrossingshasaffectedtheretailenvironmentofHongKongandMacauinFY2021.Asshowninindustrydata,retailsalesperformanceofjewelleryindustryinHongKongrecordeda38.4%declineyear-on-yearfromApril2020toMarch2021.

• Webelievethatthedomesticmarkethasbottomedoutaswerecordedabetterbusinessperformancesince2QFY2021.Whenthemajorbordercrossingsreopen, thenumberofvisitsmadeandretailmarketwouldrecovergradually.

47

RETAIL EXPANSIONSTRATEGY

Expand the businessand get closer

to customers

擴張版圖 , 貼近顧客

實動力SMART RETAILSTRATEGY

Digital empowerment and experience upgrade

科技賦能 , 體驗升級

雲動力以顧

客為中心

Customer-centric

Deploy “Dual Forces” to develop a jewellery ecosystem雙力共構開創珠寶新生態

• The travel retail business indifferentAsia-Pacific countrieshasalsobeenaffectedthroughouttheyearduetotheshutdownof international travel.However,webelievetherearegreatexpansionpotentials in the regionwith theRegionalComprehensiveEconomicPartnership (“RCEP”)betweenChinaandanumberofAsia-Pacificcountriessignedin2020;andtheHongKong-ASEANFreeTradeAgreement(“FTA”)andInvestmentAgreement (“IA”) came into full effect in February 2021.We shallmonitor thedevelopmentcloselyandtaketimelyactions.

DUAL-FORCE STRATEGY

Wewill focusmoreontheMainlandChinamarket.Ononehand,we implementourretailexpansionstrategytogetclosertoourcustomers.Tothatend,wecontinuetostrengthenourbrandsandproductofferings,andgrowthroughopeningPOSinMainlandChina.Ontheotherhand,wecarryoutour smart retail strategy. It centersondigital empowerment,allowingustocater tocustomers’needsaswecontinuetostreamlineourorder fulfilmentprocess.Wewillleveragesmartretailapplicationsandsmartmanufacturingtoofferservicesfromtheheartandspeedtocustomers.WehopethatourDual-ForceStrategywillensureourcustomerscanenjoyamorecomplete,multi-faceted,andseamlessshopping journeyandexperienceablissfulfulfilmentthroughjewellery.

48

POS NETWORK

Hong Kong and Macau

POS

100

POS97

Flagship Brand

Individual Brands

SOINLOVE

POS1MONOLOGUE

POS2

HEARTS ON FIRE

CHOW TAI FOOK JEWELLERY

SIS / CIS24

Other markets

POS

46

POS37

Flagship Brand

Individual BrandsHEARTS ON FIRE MONOLOGUE

POS POS8 1

CHOW TAI FOOK JEWELLERY

Mainland

China

POS

4,445

ENZO

POS75SOINLOVE

POS66MONOLOGUE

POS77

Individual BrandsHEARTS ON FIRE

POS1 SIS / CIS239

Flagship Brand

POS4,098CHOW TAI FOOK JEWELLERY CTF WATCH

POS128

49

MAINLAND CHINA

Retail expansion strategy

Brands and products

• AsMainlandChina’sjewellerymarkethasbeenreshapinginrecentyears,wecontinuetoexecutedifferentiationstrategytomakeinroadsintodiversecustomersegments.

• We offer curated retai l store exper iences under our f lagship brand, such as CTF JEWELRIA, CTFWATCHand experience stores, to cater to different shoppingenvironmentandconsumers’needs.Our individualbrands includingHEARTSONFIRE,ENZO,MONOLOGUEandSOINLOVE,serveourconsumerswithdifferent lifestylesandpersonalities.

• CTFJEWELRIA,oneofourinitiativesinenhancingstoreexperience,continuestorolloutmoreproductofferings fromselect internationaldesignersand jewellerybrandsontopof its signature collections to cater tomore sophisticated customers. In FY2021, CTF JEWELRIA accounted for 6.0%of theRSVof CHOWTAI FOOK JEWELLERY (1) inMainlandChina.Gem-set jewelleryASPwasaroundHK$10,000,whichwasaround40%higherthanoverallSameStoreASPofgem-setjewelleryinMainlandChina.

• Apartfromenhancingthequality,craftsmanshipandinnovationofourproducts,wealsostrivetopromoteproductcollectionsfeaturedwithappealingstories.

• CTF•HUÁCollectioncontributedto39.5%ofourgoldjewelleryandproductsRSVinFY2021.

• OurGuardianofLifeCollectionhelpedusgainmarketshareinthediamondengagementringsmarket.Itcontributedto8.7%ofourdiamondproductsRSVinFY2021.

• InFY2021,TMARKproductsaccountedfor24.7%of theRSVofourdiamondproductsandincreasedby60.7%inMainlandChina.WewilldistributemoreTMARKproducts inMainlandChinaforvaluedcustomerswhoembraceauthenticityandtechnology.

(1) CTF Watch excluded

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Retail network

• We strive togainmarket share in theMainlandChinamarket.Hence,we focusonimplementingourtwo-prongedstrategy.

• Ourdiversifiedproductoffering laida foundation inexpandingour retailnetwork indifferentcities inMainlandChina.Keyelements includingcity’seconomic indicators,governmentpolicyandpeers’distributionnetworkareessential in implementingourretailexpansionstrategy.

• ForTierIandIIcities,wecontinuetooffercuratedretailexperiencesthroughupgradingourstoresandenhancingstoreexperiencesofour flagshipbrandto fulfil theneedsofmoresophisticatedcustomers.Wealsoexpandourindividualbrandsinlocationsthatfitthebrandimageforcustomerswhosharethesamepersonalitiesorvalues.

• For lower tierandcounty levelcities,wewouldpenetrate further into themarketbyleveragingourfranchisees’localknowledgeandaccess.

• InFY2021,therewere669netPOSopeningsofCHOWTAIFOOKJEWELLERY(1),ofwhich64netPOSopeningswereCTFJEWELRIA.

• Inviewoftheexcellentperformanceofourwatchbusiness,whichwassupportedbythestrongdomesticdemand,wewill continue to identifyopportunities toexpandournetworkinthehighpremiumwatchbusiness.

(1) CTF Watch excluded

Smart retail strategy

Everycustomerexpectsnothinglessthanbeingtreatedasthesinglemostimportantpersonbyus.Tothatend,ouromni-channelretailingaimtooffercustomerswiderarrayofchoicesandgreaterconvenience.Ourstaffprovidepeople-to-peopleengagementwithdigital toolsanddatatoengagecustomers,helpingthemenjoytheirseamlessshoppingexperience.

Wealsodoubledownon increasingpublicdomainvisibility.Morecontactpoints, togetherwithamorediversifiedsmart retailexperiencecouldbringnewcustomersandbusinessopportunitiestous.

Meanwhile,astreamlinedsupplychain iskeytooursmart retail strategy.Notonly that itimprovesourcustomisationcapabilitiesbutalsodriveshigheroperationalefficiency thatwoulddifferentiateusinthejewelleryindustry.

E-commerce

• Wecontinuedourclosecollaborationwithvariousrenownede-commerceplatforms inMainlandChina, suchasTmall, JD.comandVipshop, thusgainingmoreaccess toourcustomers.Whileoure-commercebusinessisgraduallygettingmorematureinMainlandChina’sretaillandscape,itservesasthemainportalforourpublicdomain.

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• Werideoncurrent trends, suchasdirect salesvia livestreamingandshortvideos inthird-partymarketplaces, such as TikTok, in order to expand and enhance ourengagementwithcustomers.Thisallowsustobetterunderstandthecustomers’needsandpreferencesonourproductsaswellas theirspendingpattern,whichwillbeusefulforlaunchingmoresuccessfulproductsinthefuture.

• Weareactivelyexploringchangesinoursalesmodelstocopewiththeemergingtrendoflivestreaming. For example,we introduced jade finishedproducts and customisedproducts livestreaming on e-commerce platforms sinceDecember 2020 tomeetdiversifiedcustomerneeds.

Smart retail applications

• Leveragingbothouromni-channelcapabilitieswhichweactivelydeveloped inthepastand our extensive retail network,we continue to push forward our smart retailapplications.

• Ourstaffcementedtheirsuccesswithoursmartmobiletool,CloudSales365.InFY2021,morethan40,000staff inourself-operatedandfranchisedstoresusedCloudSales365 to reachmore than3.7million customers.Notonlydid it attract new customers, CloudSales365’sASPand sales conversation ratewereabout80%higher thanandaround10timesthee-commerceplatforms’performancerespectively.

• Asat31March2021,over40%ofourPOSinMainlandChinahaveinstalledCloudKiosks.Whileataphysicalstore,customerscanuseCloudKioskstoexploreor lookupawideproduct selectiononlineandshorter transaction time.Agamifiedexperience isalsoofferedattheKiosks.

• We introducedD-ONE,ourdigital jewellery customisationplatform, asoneofourConsumer toManufactory (“C2M”) initiatives tocater to thecustomerdemands forcustomisedproductsandexclusiveexperiences.

• WithD-ONE,most customisedproducts are ready for deliverywithin 24hours ascommitted.Incrediblefulfilmentspeedisthesignatureofthisplatform.

• Variousbrandsandproducts, suchasHEARTSONFIREandTMARK,were introduced toD-ONE in FY2021. In February 2021,we have also launched CHOWTAI FOOK TIANHUANGDILAOCollectiononD-ONE,featuringringsthattransformthereflectionoflightintopersonalisedmessages,thankstoouruseoftheinnovativelaserdiffractiontechnology.

• InFY2021,werecordedaRSVofHK$133millionthroughD-ONE.ItisencouragingtoseethattheASPofthesecustomisedproductswasmorethandoublethegem-setjewelleryASPatSameStorelevelinMainlandChina.

• Togetherwiththe initiativestoenhancetheautomation levelofoursupplychainandestablishvariousdigitalplatforms,westrivetodeliverunparalleledcustomerexperience.

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Customer engagement

FY2021

29.4%Members’ repeat purchase as a % of respective RSV

Number of members

As at 31 March 2021

Mainland China

3,035,000

• Weunderstandthatcustomerrelationshipmanagement (“CRM”) isoneof thesuccessfactorsofourbusinesses.

• Notonlydidwe invest inbrandingand large-scaleproductpromotion,butwealsoleveragedthestrengthofsocialmediainfluencers–KeyOpinionLeaders(“KOL”)andKeyOpinionConsumers(“KOC”)toattractourtargetcustomers.

• Currently,CloudSales365isintegratedwithourCRMsystemsothatourfrontlinestaffarearmedwithtimelyinformationtooffermoretargetedservicestocustomersanytime,anywhere.

HONG KONG, MACAU AND OTHER MARKETS

Retail expansion strategy

Brands and products

• InHongKong,Macauandothermarkets,weshall focusonpromotingourservicesandproductsthroughourflagshipbrand.

• Wecontinue toofferproducts indifferent segmentsand to fulfil customers’needsthroughout their journey.Wealsobringexclusiveproductswith localised features inordertocreateproductdifferentiation.

• InFY2021,TMARKproductsaccountedfor31.6%of theRSVofourdiamondproductsanddroppedby13.8%inHongKongandMacau.

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Retail network

• InFY2021,weclosedanetof6CHOWTAIFOOKJEWELLERYPOS intouristareas intheHongKongandMacaumarketsasthenumberoftouristsfromMainlandChinadeclined.FurtherPOSconsolidationwilldependonexpectedborder reopeningand the rentalmarketconditionof retail realestate.However,wecontinuetostrivetomaintainourleadership inbothmarkets.Forthisreason,weshallnothesitatetoexpand instrategiclocations.Forinstance,werecentlyopenedournewPOSintheCastleofMagicalDreamsinHongKongDisneyland.

• InFY2021,anetof4POSinAsia-Pacificareawereclosedasbusinesswasaffectedbythepandemic.However,wewillcontinueto identifyopportunities inAsia-Pacificandmaycontinueourexpansionwheninternationaltravelresumes.

• Fiveduty-freePOSwereopened inHainan,MainlandChinaduringthefinancialyear inordertoserveourtravelretailcustomerswhohavebeenaffectedbythesuspensionofinternational travel.Wewil l continue to expand in thismarket alongwith thedevelopmentofduty-freeshoppinginMainlandChina.

Smart retail strategy

• Wewillalsoadjusttheimplementationstrategyofsmartretailapplicationsaccordingtodifferentgeographicneeds.

• InHongKong,Macauandothermarkets, thechallengingbusinessenvironmenthaspromptedusto focusontransformingourcurrentbusinessmodel through innovationandtechnologyinordertoenhanceretailexperienceandimproveoperationalefficiency.

• Approximately22%ofourPOS inHongKongandMacau installedCloudKiosksasat31March2021.

• WearealsooptimisingsmarttoolsintheHongKongandMacaumarkets,hopingthatitwillhelpbuildingclosertiesbetweenourstaffandcustomers,and increasetrafficbothonlineandoffline.

• TobettercatertothelifestyleandshoppingpreferencesofcustomersinHongKongandMacau,weattemptedtoplacesmartvendingmachines indifferentshoppingmallsasapilot in FY2021 to create unique shopping scenarios and experiences,whichwassuccessfulinattractingdifferentgroupsofcustomers.

• InFY2021,wehavealsostartedpartnershipwithKDollar rewardsystemofNewWorldDevelopmenttobroadenourcustomerbaseandboostrecurringspending.

FY2021

44.1%Members’ repeat purchase as a % of respective RSV

Number of members

As at 31 March 2021

Hong Kong and Macau

1,225,000

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SMART MANUFACTURING

Theobjectiveof smartmanufacturing is to increase theoperational speedof theoverallsupplychain.Tothisend,weimplementtheC2Minitiative,sothatproductioncanseamlesslybeconnectedwithcustomersand the frontline.Meanwhile,wealso focusonenhancingproductdevelopmentcapabilitytobettersupportourretailexpansionstrategyinthecomingyears.

C2M

• Weadopt the Industry4.0 framework to transformtheconventionalmanufacturingmodelintoC2MofwhichD-ONEisoneofourimplementationmeasures.

• Wemake full use of the Internet of Things (“IoT”) technology in our productionprocesses,suchthatequipment is interconnectedandminimumhuman involvement isrequired.Weconnectourhighlyautomatedproduction lineswithcustomersseamlesslyviaD-ONE,providingcustomersspeedyservicesthatcanfulfiltheirneedsforcustomisedproducts.

• Wealsoapply the“DigitalTwin”model toestablishadigitalvirtual factory throughaproduction simulation system for performing geometric simulations, and in turnidentifyingtheoptimumproductionarrangementandresourceallocation.At thesametime,weusesensors ineachprocessandequipment inphysical factories tocontrolactual production progress against s imulated estimates in real t ime, al lowingmanagementpersonneltodealwithabnormalsituationsimmediately.

Product development capability

• Wevalueourproductsandservices.Wearecommittedtopreservingandreinvigoratingtraditionalcraftsmanship.At thesametime,wecultivate theartisanal spirit throughpromotingcross-generationalcraftsmanship, innovationandnewtechnologies in theindustry.Withmorethan20yearsofresearchandproductionexperience,thecraftsmenof ChowTai Fook’sMaster Studio strive for product improvement by combiningtraditionalcraftsmanshipandinnovativetechnologies.

• C+CreativePark isdesigned for startupentrepreneurs tocreateanenvironment forbusiness incubation and to explore cooperation opportunities among investors,governmentandotherstakeholders.ThisincubationspaceestablishedatChowTaiFookJewelleryParkinWuhan,MainlandChina,istosupportstartupsinfourmajorindustries,namely,culturalandcreativedesign,e-commerce, innovativetechnologyandmaterials,andeducationand training. TheParkaims to facilitatedevelopmentof a jewelleryecosystemandcreatesynergywithinit,whichinturnwillbenefitthejewelleryindustry.Meanwhile,wecooperatedwithnumeroussuccessfulstartupstoadopttheir innovativetechnologyproductsinouroperations.

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BUSINESS OUTLOOK AND STRATEGIES

InFY2021,despiteachallengingbusinessenvironmentbroughtaboutbythepandemic,ourMainlandChinabusinesscontinuedtodeliverstronggrowthperformance.

With theChinesegovernment’s “dual circulation” strategy,webelieved that jewelleryindustrycouldbenefitfromthegrowthindomesticconsumption.Asweareoptimisticaboutthemid-to long-termgrowth intheMainlandChinamarket,wewill focusonourMainlandChina’sbusinessdevelopmentinthecomingfuture.Ononehand,wewillcontinueourretailexpansionstrategythroughpenetratingintolowertiercitiesandleveragingfranchisees’localknowledge.Ontheotherhand,wewouldpush forwardoursmart retail strategy throughenhancingtheretailexperienceandfocusingonO2Ochannelintegrationstotakeadvantageofdigitaltransformation.

ThoughHongKongandMacaumarketsare facingmultiplechallengescurrently,webelievethatthedomesticmarkethasbottomedoutasthepandemicsituationisexpectedtobecomemorestable.Whenthemajorbordercrossingsreopen,thenumberofvisitsmadeandretailmarketwouldrecovergradually.

Forothermarkets,wewill focusoncountrieswithahigherdomestic consumption,andcontinueourexpansionstrategywheninternationaltravelresumes.

When itcomestosmartmanufacturing, inordertocopewithfuturedevelopmentandC2Minparticular,wewill furtherenhanceourautomation levels tomeettheproductneeds. Inthe future,wewillenhance thedevelopmentofourWuhancentre to support the rapiddevelopmentof the frontlineasWuhan’sadvantageousgeographical location canhelpacceleratetheoveralllogistics.

Wearedelightedtoreport thatwearemovingsteadily towardsour four long-termgoals,namely,(1)tostrengthenourmarketleaderpositionasweseekfurthermarketpenetration;(2) todevelop a comprehensive jewellery ecosystem; (3) tobe a tech-savvy jewellerycompanybyharnessinginnovationandtechnology;and(4)toimproveoperationalefficiencythroughdigitaltransformation.

Going forward,webelieve that ourDual-Force Strategywill enableour customers toexperienceablissfulfulfilmentthroughjewellery.

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THE UNAUDITED KEY OPERATIONAL DATA FROM 1 APRIL TO 31 MAY 2021

From1Aprilto31May2021,theyear-on-yearchangesofRSVandSSSareasfollows:

(% change compared to the same period last year)

Group

RSVgrowth 77.0%

Mainland ChinaHong Kong, Macauand other markets

RSVgrowth 74.7% 98.5%ContributiontoGroupRSV 89.1% 10.9%

Mainland ChinaHong Kong and

Macau SSSG 49.3% 159.7%SSSvolumegrowth 32.2% 125.9%

SSSGbyproduct —Gem-set,PlatinumandK-goldjewellery 4.0% 110.8% —Goldjewelleryandproducts 73.6% 219.5%

Theunauditedkeyoperationaldatafrom1Aprilto31May2021waspreparedbasedonthelatestavailablemanagementaccountsandthe informationcurrentlyavailabletotheGroup.ThepositionremainstobereviewedbytheCompany’sauditor, itsauditcommitteeandtheBoard.

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FINAL DIVIDEND AND ANNUAL GENERAL MEETING

TheBoardrecommendedthepaymentofa finaldividendofHK$0.24pershare forFY2021,amountingtoapproximatelyHK$2,400million(FY2020:afinaldividendofHK$0.12pershare,amountingtoapproximatelyHK$1,200million).Suchpaymentofdividendwillbesubject totheapprovalofshareholdersat theforthcomingannualgeneralmeetingof theCompanytobeheldonWednesday,28July2021andispayabletoshareholderswhosenamesappearontheregisterofmembersoftheCompanyatthecloseofbusinessonThursday,5August2021.It isexpectedthat theproposed finaldividendwillbepaidonoraboutFriday,20August2021.Noticeoftheannualgeneralmeetingwillbepublishedanddespatchedtoshareholdersof theCompany inthemannerrequiredbytheRulesGoverningtheListingofSecuritiesonTheStockExchangeofHongKongLimited(the“ListingRules”)induecourse.

REVIEW OF ANNUAL RESULTS

TheAuditCommitteeof theCompanyhasreviewedtheaccountingprinciplesandpracticesadoptedbytheGroupandtheconsolidatedfinancialstatementsoftheGroupforFY2021.

The figures in respect of theGroup’s consolidated statement of financial position,consolidatedstatementofprofitor lossandothercomprehensive incomeandtherelatednotestheretofortheyearended31March2021assetoutinthepreliminaryannouncementhavebeenagreedbytheGroup’sauditor,PricewaterhouseCoopers,totheamountssetoutintheGroup’sdraftconsolidated financial statements for theyear.TheworkperformedbyPricewaterhouseCoopers in this respectdidnot constituteanassuranceengagement inaccordancewithHong Kong Standards onAuditing,Hong Kong Standards onReviewEngagementsorHongKongStandardsonAssuranceEngagements issuedbytheHongKongInstituteofCertifiedPublicAccountantsandconsequentlynoassurancehasbeenexpressedbyPricewaterhouseCoopersonthepreliminaryannouncement.

CORPORATE GOVERNANCE PRACTICES

Duringtheyearended31March2021,theCompanywasinfullcompliancewithallapplicableprinciplesandcodeprovisionsof theCorporateGovernanceCodeassetout inAppendix14totheListingRules.

DIRECTORS’ SECURITIES TRANSACTIONS

TheCompanyhasadoptedacodeofconductregardingdirectors’securities transactionsontermsnolessexactingthantheModelCodeforSecuritiesTransactionsbyDirectorsofListedIssuers (the“ModelCode”)as setout inAppendix10 to theListingRules.HavingmadespecificenquiryofallDirectors, theDirectorsconfirmedthat theyhadcompliedwith the requiredstandardassetoutintheModelCodeandtheCompany’scodeofconductduringFY2021.

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PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES

NeithertheCompanynoranyofitssubsidiarieshaspurchased,soldorredeemedanyoftheCompany’slistedsecuritiesduringtheyear.

CLOSURE OF REGISTER OF MEMBERS

Inorder toestablishentitlements toattendandvoteat the forthcomingannualgeneralmeetingoftheCompany,theregisterofmembersoftheCompanywillbeclosedfromFriday,23July2021toWednesday,28July2021,bothdaysinclusive,duringwhichperiodnotransferof share of the Companywill be registered. All transfers of shares of the Companyaccompaniedbytherelevantsharecertificatesandproperlycompletedtransfer formsmustbe lodgedwiththebranchshareregistrarandtransferofficeoftheCompany inHongKong,Tricor InvestorServicesLimitedofLevel54,HopewellCentre,183Queen’sRoadEast,HongKongforregistrationnolaterthan4:30p.m.onThursday,22July2021.

Inordertoestablishentitlementstotheproposedfinaldividend,theregisterofmembersoftheCompanywillbeclosedonThursday,5August2021andno transferof shareof theCompanywillberegisteredonthatday.AlltransfersofsharesoftheCompanyaccompaniedbytherelevantsharecertificatesandproperlycompletedtransferformsmustbelodgedwiththebranchshareregistrarandtransferofficeof theCompany inHongKong,Tricor InvestorServices Limitedof Level 54,Hopewell Centre, 183Queen’sRoadEast,HongKong forregistrationnolaterthan4:30p.m.onWednesday,4August2021.

ForandonbehalfoftheBoardDr. Cheng Kar-Shun, Henry

Chairman

HongKong,8June2021

As at the date of this announcement, the executive directors are Dr. Cheng Kar-Shun, Henry, M r . W o n g S i u - K e e , K e n t , M r . C h a n S a i - C h e o n g , D r . C h e n g C h i - K o n g , A d r i a n , Mr. Cheng Chi-Heng, Conroy, Ms. Cheng Chi-Man, Sonia, Mr. Cheng Kam-Biu, Wilson, Mr. Cheng Ping-Hei, Hamilton, Mr. Suen Chi-Keung, Peter and Mr. Liu Chun-Wai, Bobby; a n d t h e i n d e p e n d e n t n o n - e x e c u t i v e d i r e c t o r s a r e D r . F u n g K w o k - K i n g , V i c t o r , Dr. Or Ching-Fai, Raymond, Mr. Kwong Che-Keung, Gordon, Mr. Cheng Ming-Fun, Paul, Mr. Lam Kin-Fung, Jeffrey, Mr. Chia Pun-Kok, Herbert and Ms. Cheng Ka-Lai, Lily.

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