November 2019

Stock Code：1929 • A Hong Kong Main Board Listed Company

CHOW TAI FOOK JEWELLERY GROUP LIMITED周 大 福 珠 寶 集 團 有 限 公 司

Agenda

About Chow Tai Fook Jewellery Group

Financial Highlights 

Business Outlook and Strategies

Appendix

About Chow Tai Fook Jewellery Group

Our Vision & Mission

To become the most trusted jewellery group in the world

Vision

Mission

Globalisation

Develop a global jewellery eco‐system by 

leveraging our agile business model

Innovation

Invest in our business, people and culture; embrace 

innovations to drive long‐term growth

Diversification

Provide a wide array of jewellery catering to diverse consumer needs

IndustryLeadership

Elevate the jewelleryindustry’s 

professional standards

Sustainability

Unlock future possibilities with 

sustainable practices

4

The Story of Chow Tai Fook Jewellery Group 

Heritage x Craftsmanship x Innovation

1929Started engaging in the jewellerybusiness

1956Launched the 999.9 gold jewelleryproducts in Hong Kong & Macau, which became an industry standard in 1980s

1990Implemented the “Fixed Price” policy in Hong Kong & Macau which enhanced pricing transparency

1998Opened the first POS in Beijing, Mainland China

2011Listed on the Main Board of The Stock Exchange of Hong Kong (SEHK stock code: 1929) 

Opened the Chow Tai FookeShop

2014Opened our 2,000th POS in Wuhan, Mainland China

Acquired HEARTS ON FIRE,  a U.S. premium diamond brand

2016Became a reference price member of Shanghai Gold Benchmark Price

Launched T MARK diamond brand

2017Introduced SOINLOVE and MONOLOGUE

2015Unveiled the Cullinan Masterpiece “A Heritage in Bloom” 2018

Collaborated with GIA to bring digital diamond grading reports to consumers via blockchain

2019Celebrating 90thAnniversary

5

Chow Tai Fook Capital Limited

Cheng Yu Tung Family(Holdings) Limited

Cheng Yu Tung Family(Holdings ll) Limited

49.0% 46.7%

81.0%

Chow Tai Fook (Holding) Limited

89.3% 10.7%

Chow Tai Fook Jewellery Group Limited(Stock code: 1929.HK)

As at 30 September 2019

Public Float

Shareholding Structure 

6

Board of Directors

Cheng Kar‐Shun, Henry 

Wong Siu‐Kee, Kent

Cheng Chi‐Kong, Adrian

Cheng Chi‐Heng, Conroy

Cheng Ping‐Hei, Hamilton

Chan Sai‐Cheong

Suen Chi‐Keung, Peter

Chan Hiu‐Sang, Albert

Liu Chun‐Wai, Bobby

Cheng  Ka‐Lai, Lily

Cheng Kam‐Biu, Wilson

Fung Kwok‐King, Victor

Cheng Chi‐Man, Sonia

Lam Kin‐Fung, Jeffrey

Cheng Ming‐Fun, Paul

Kwong Che‐Keung, Gordon

Or Ching‐Fai, Raymond

Chairman Managing Director

Executive Director

Non‐executive Director Independent Non‐executive Director

Investment Highlights

Iconic & Trusted Brand Dedicated & Effective Management

Business Model Innovations Omni‐channel Retailing

Multi‐brand Strategy

Market leader in Mainland China, Hong Kong, China and 

Macau, China

Our management team possesses diverse professional 

backgrounds and years of executive experience

A broad and growth‐oriented brand portfolio appeals to customers from different 

market segments

Comprehensive e‐commerce platforms and strategic partnership  help shape a seamlessly integrated 

O2O customer experience

An agile business model gives us effective and instantaneous control 

over the entire value chain

8

Multi‐brand Strategy

ARTRIUMChow Tai Fook’s high‐end 

retail experience which offers artisan jewellery pieces with meticulous craftsmanship

CHOW TAI FOOK JEWELLERYIconic brand with classic 

product offerings

MONOLOGUEStylish fashion jewellery 

for young generation

T MARKIn pursuit of true diamond authenticity and  traceability

HEARTS ON FIREUS premium diamond brand with exquisite cutting craftsmanship

JEWELRIAChow Tai Fook’s diversified 

retail experience which offers international 

jewellery product offerings

SOINLOVETop of mind Jewellery gifting product of millennial women

9

POS by tier of citiesTier IV 

Tier I          Tier II            Tier III    & others

48.2% 51.8%

12% 42.7% 20.8% 24.4%

Retail Network – Mainland China Mainland China  (CHOW TAI FOOK JEWELLERY POS)

POS by operation modelSelf‐operated POS          Franchised POS

As at 30 September 2019

1 Shop‐in‐shop and counter‐in‐shop excluded

Note: The percentages calculated are subject to minor rounding differences 

POS movement by store brand1

1H2019 FY2019 Addition Reduction Net 1H2020

CHOW TAI FOOK  JEWELLERY 2,537 2,803 407 (74) 333 3,136

CTF WATCH 107 113 3 (3) – 113

T MARK 1 4 – – – 4

HEARTS ON FIRE 6 3 – (2) (2) 1

SOINLOVE 15 27 9 – 9 36

MONOLOGUE 16 38 12 (2) 10 48

Total 2,682 2,988 431 (81) 350 3,338

10

Retail Network – Hong Kong, Macau and other markets 

POS movement by store brand1

1H2019 FY2019 Addition Reduction Net 1H2020

CHOW TAI FOOK JEWELLERY 124 130 12 (3) 9 139

Hong Kong, China 78 80 6 (1) 5 85

Macau, China 19 19 – (2) (2) 17

Other markets 27 31 6 – 6 37

T MARK 1 1 – – – 1

HEARTS ON FIRE 15 15 – (4) (4) 11

MONOLOGUE – – 1 – 1 1

Total 140 146 13 (7) 6 152

11

As at 30 September 2019

1 Shop‐in‐shop and counter‐in‐shop excluded

E‐commerce – Mainland China

As at 30 September 2019

1 Source: Chow Tai Fook eshop, Tmall and JD.com2 Source: Official Sina Weibo, Tencent Weibo and WeChat accounts

9.7%  YoY

E‐commerce RSV

9,643,000+

Unique daily visitors1

487,000Number of followers2

HK$1,300

Average selling price

HK$1,400 1H2019

Contribution to respective

4.9% 14.1%RSV Retail sales volume

12

Financial Highlights

Summary – Income Statement

1 Revenue from jewellery trading and service income from franchisees excluded2 Adjusted gross profit margin = Gross profit margin excluding the impact of the unrealised loss (gain) on gold loans

14

For the six months ended 30 September(HK$ m) 1H2018 1H2019 1H2020 YoY

Change

Revenue 24,754 29,703 29,533 ‐0.6%

Contribution of gem‐set jewellery1 24.2% 23.4% 23.3% ‐0.1% pts

Gross profit 7,166 8,529 8,147 ‐4.5%

Gross profit margin 28.9% 28.7% 27.6% ‐1.1% pts

Adjusted gross profit margin2 28.7% 28.1% 30.7% +2.6% pts

Selling and distribution costs and general and administrative expenses (“SG&A”) 4,887 5,517 5,750 +4.2%

SG&A to revenue ratio 19.7% 18.6% 19.5% +0.9% pts

Core operating profit 2,396 2,989 3,527 +18.0%

Core operating profit margin 9.7% 10.1% 11.9% +1.8% pts

Profit before taxation  2,504 2,722 2,200 ‐19.2%

Profit attributable to shareholders 1,779 1,936 1,533 ‐20.8%

Basic earnings per share HK$0.18 HK$0.19 HK$0.15 ‐20.8%

Dividend per share HK$0.12 HK$0.15 HK$0.12 N/A

Revenue by reportable segment (HK$ m) Revenue by product (HK$ m)(Excluding jewellery trading and service income from franchisees)

1H2016 1H2017 1H2018 1H2019 1H2020 1H2016 1H2017 1H2018 1H2019 1H2020

Hong Kong, Macau and other marketsMainland China

Platinum / Karat gold products

Gem‐set jewelleryGold products

Watches

28,023

21,301

55.7%

27.2%

12.7% 12.9%5.0% 6.3%

53.6%

26.6% 24,127

24.2%

11.3%6.7%

57.8%

‐0.5%

‐2.6%

9.2%

YoY Change

0.0%

14.0%

12.2%

‐20.3%

YoY Change

‐0.6%

59.7%

59.2%

28,124

40.8%40.3%

21,526

60.4%

39.6%

24,754

29,703

60.7%

39.3%

29,309

23.4%

10.5%5.6%

60.5%

Revenue Breakdown

29,533

68.5%

31.5%

29,319

23.3%

11.4%6.4%

58.9%

15

Same Store Sales Growth (“SSSG”) – Major Markets

1H2019 1H2020

SSSG SSSG SSS volume growth

Mainland China 4.9% 1.8% ‐11.7%

Hong Kong and Macau 24.4% ‐27.5% ‐29.7%16

26.0%23.0%

‐6.0%0.7%

‐10.9%

‐42.3% ‐38.4%

3.8% 5.7%

‐7.4%

9.1% 10.5%

‐6.8%

0.7%

Mainland China Hong Kong and Macau

1Q 2Q1Q 2Q 3Q 4Q

FY2019 FY2020

3QTD(1 Oct‐21 Nov)

SSSG – Major Products

Same store average selling price1 (HK$) 1H2019 1H2020

Gem‐set jewellery 6,300 6,300

Gold products 3,900 4,900

Same store average selling price1 (HK$) 1H2019 1H2020

Gem‐set jewellery 10,400 10,400

Gold products 8,200 8,800

1 Average selling price on 1H2020 same store basis, was rounded to the nearest hundred HK dollar and measured at constant exchange rates; Value‐added tax (VAT) in Mainland China included

SSSG – Mainland China SSSG – Hong Kong and Macau

17

10.8% 11.1%

‐11.0%

13.5% 12.4%

‐15.4%

‐3.8%‐3.8%1.0% ‐5.4%

0.1%

8.0%‐0.4%

1.7%

30.9% 40.7%

‐5.6% 2.6%‐12.7%

‐49.2%

‐35.1%

26.4%

‐2.3% ‐8.2% ‐10.4% ‐15.7% ‐34.8%

‐49.5%

Gem‐set jewellery Gold products Gem‐set jewellery Gold products

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

FY2019 FY2020

3QTD(1 Oct‐21 Nov)

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

FY2019 FY2020

3QTD(1 Oct‐21 Nov)

SSSG – Mainland China SSSG – Hong Kong and Macau

30.7% 29.7% 31.9%

19.2% 18.9% 18.4%

12.4% 11.4%14.1%

1H2018 1H2019 1H2020

Core Operating Profit and Profitability Analysis

Core operating profit marginAdjusted gross profit margin SG&A ratio

Core operating profit YoY 1H2019 1H2020

Mainland China 11.3% 37.8%

Hong Kong, Macau and other markets 70.5% ‐26.1%

Core operating profit by reportable segment (HK$ m) Profitability – Mainland China

Core operating profit marginAdjusted gross profit margin SG&A ratio

Profitability – Hong Kong, Macau and other markets

1,853 2,062 

2,843 

543 

926 685

1H2018 1H2019 1H2020Mainland ChinaHong Kong, Macau and other markets

25.5% 25.5% 28.1%

20.5%18.1%

21.8%

5.5% 7.9% 7.4%

1H2018 1H2019 1H2020

18

1 Adoption of IFRS 16 Leases for the first time in 1HFY2020, prior-period comparative financial information is not restated

SG&A Analysis (HK$ m)

19

737  893  840 121 

138  287 178 313  271383 413 

817 769 

118 809 860  866 

1,842 

2,131  2,291 

1H2018 1H2019 1H2020

19.7%18.6% 19.5%

%  

%  

7.4%

0.7%0.5%

3.3%

3.3%

1.5%

7.2%

1.1%0.5%

2.9%

2.6%

1.4%

%  

7.8%

0.9%1.0%

2.9%

0.4%

3.7%

1H2018 1H2019 1H20201

4,887

5,5175,750

7.5%

‐84.7%

‐13.4%

161.1%

107.6%

YoY Change

4.2%

As a % of revenue

Depreciation and amortisation (Property, plant and equipment)

Concessionaire fees

Advertising and promotion expenses

Rental expenses

Other SG&A

Staff costs and related expenses

0.7%

3.0% 3.0% 2.8% ‐6.0%

Packaging materials

636

Depreciation and amortisation (Right‐of‐use assets, “ROU”)

442

1H2018 1H2019 1H2020

36.9%

57.5%

39.5%

54.0%

725

625

7.1% 6.7% 8.4%

1H2018 1H2019 1H2020

34.3%

62.3%

32.8%

63.5%

1,303

1,133

7.6%7.2% 7.3%

1H2020 Averageno. of employees1

21,000+3.3% YoY

3,270+4.1% YoY

1H2020 Average no. of employees1

3.6%3.4% 6.5%5.5%

YoY Change

24.8%

13.3%

‐0.4%

‐0.8%

YoY Change

3.0% 3.7%

As a % of respective revenue

Variable staff costsFixed staff costsOther staff related expenses

As a % of respective revenue

Variable staff costsFixed staff costsOther staff related expenses

1 Employees in production function excluded

8.0%‐1.7%

Mainland China Hong Kong and Macau

1,476

36.2%

60.6%

3.3%

719

39.6%

53.6%

6.8%

SG&A – Staff Costs and Related Expenses (HK$ m)

20

1H2018 1H2019 1H2020

89.2%

7.0%575

667

8.8%8.6%

8.7%

801 853  865 

1H2018 1H2019 1H2020

7.4%5.2%

6.2%

3.8%

YoY Change

1.5%

-2.5%

YoY Change

As a % of respective revenueConcessionaire fees

Mainland China Hong Kong and Macau

1 Adoption of IFRS 16 Leases for the first time in 1HFY2020, prior-period comparative financial information is not restated

561

As a % of respective revenue

Rental expensesDepreciation and amortisation (ROU)Finance costs on lease

Pre-IFRS 16 Post-IFRS 16

1

SG&A – Concessionaire Fees and Lease‐related Expenses (HK$ m)

21

70  60  68 

261239 

295 

1H2019 FY2019 1H2020

299

331362

1,801  1,672  1,591 2,895  2,835  3,411 

13,202  13,426  14,800 

20,458  21,394 22,521 

1H2019 FY2019 1H2020

39,32738,356

Inventory Analysis

Finished goodsRaw materials

1 Packaging materials excluded2 Inventory turnover period = Closing inventory balances (excluding packaging materials) / cost of goods sold x 183 (for 1H figures) or 365 (for FY figures)

Watches

Gem‐set jewelleryGold productsPlatinum / Karat gold products

%  

54.4%

4.3%7.2%

34.1%

%  

53.3%

4.7%7.5%

34.4%

53.2%

35.0%

%  

8.1%3.8%

Inventory balances by product1 (HK$ m) Inventory turnover period by category2 (day)

42,323

22

68 46 18

77  148 

49 

265 

334

378

1H2018 1H2019 1H2020

528

410444

73 73  39

61 47 48

159 

299 322 

117 

109 

35 

1H2018 1H2019 1H2020

528

410444

Capital Expenditure (HK$ m)

Furniture, fixtures and equipment & leasehold improvementsLand and buildings & construction in progressPlant and machinery & motor vehicles

Offices

ProjectsPOSProductions

Capex by nature Capex by function

23

Changes in Capital Structure

1 Bank balances and cash equivalents included 2 Aggregate of bank borrowings, gold loans, net of cash and cash equivalents

(HK$ m) As at 31 Mar 19

% to total equity

As at 30 Sep 19

% to total equity

Increase/(decrease)

Non‐current assets 8,459 26.9% 10,487 38.8% 2,027

Inventories 39,486 125.7% 42,520 157.5% 3,034

Cash and cash equivalents1 7,641 24.3% 5,151 19.1% (2,490)

Total borrowings 18,069 57.5% 21,535 79.8% 3,467

Bank borrowings 10,057 32.0% 11,080 41.0% 1,024

Gold loans 8,012 25.5% 10,455 38.7% 2,443

Net debt2 10,428 33.2% 16,384 60.7% 5,957

Net current assets 26,307 83.8% 19,113 70.8% (7,194)

Total equity 31,403 100% 27,002 100% (4,401)

24

Summary – Movements in Cash Flows (HK$ m)

1 Net cash from operating activities less leases paid, capital expenditure and net movements for gold loans2 With adoption of IFRS 16, leases paid was included in financing activities 3 Net cash used in inventories included net change in inventories, gold loan raised and repayment of gold loans 25

7,641

4,902 6212,701

706 4441,023 5,038

317 5,151

FY2019(31 Mar 19)

1H2020(30 Sep 19)

Net cash used in inventories3

Operating cash flows before movements in working capital

Net cash from other operating activities

Capital expenditureNet increase in bank borrowingsDividends paidOther movements

Bank balances and cash

Bank balances and cash

Pro forma free cash flows11,842

Leases paid2

Business Outlook and Strategies

Business Outlook and Strategies

• Hong Kong and Macau: Remains challenging in the next 6‐12 months

• Mainland China:  Continues to deliver stable growth to the Group

Business outlook

Strategies and measures

• Immediate measures are in place to mitigate the short‐term impact and improve our risk management:

Enhance healthy financial position

Optimise the use of resources

Empower our people to be “intrapreneurs”

• The Group maintains focus on long‐term goals and invests in technology to enhance retail experiences and operating efficiency

27

Appendix

Appendix ‐ Major Awards & Recognitions

9th Asian Excellence Award 2019

• Asia’s Best CEO (Investor Relations) – Kent Wong 

• Asia’s Best CFO (Investor Relations) – Hamilton Cheng 

• Best Investor Relations Company (Hong Kong)

• Best Investor Relations Professional – Danita On 

Listed Company Awards of Excellence 2019 

• Main Board (Large‐Cap) 

Governance

Corporate Governance Asia 

Listed Enterprises of the Year 2019 

• Listed Enterprises of the Year

• Performance Award 

• Best Investor Relations

• Best Corporate Social ResponsibilityMerComm, Inc. 

Mercury Excellence Awards 2018/2019 • Silver Award 

(Publicity – Sustainability Awareness) 

ARC Awards 2019• Silver Award

(Interior Design: Jewellery)

Galaxy Awards 2019• Bronze Award 

(Design – Annual Reports: Traditional – Asia/Pacific)

29

Bloomberg Businessweek / Chinese Edition Hong Kong Economic Journal 

Appendix ‐ Major Awards & Recognitions

HKMA/TVB Awards for Marketing Excellence 2018

• HKMA/TVB Awards for Marketing Excellence –Excellence Award

• Chow Tai Fook Jewellery Group Digital Marketing Practice Champion

• Citibank Citation for Innovation 

JNA Awards 2019

• Manufacturer of the Year ‐ Jewellery

Corporate and Branding

The Hong Kong Retail Innovation Award 2019

• Best Retail Innovation (Application) Award  ‐ Use of Technology

Informa MarketsWorld Intellectual Property Organization

30

Forbes 2019 Global 2000 World’s Largest Public Companies

The Hong Kong Management Association

Hong Kong Retail Technology Industry Association

Technology

The 46th International Exhibition of Inventions Geneva

• Gold medal (CHOW TAI FOOK T MARK nano‐inscription technology)

• Silver medal  (Automatic Machine for Diamond Setting Operation)

Forbes

Appendix ‐ Major Awards & RecognitionsCorporate Social Responsibility

Best HR Awards 2018• Best Corporate Social 

Responsibility Award (Champion)

CTgoodjobs

31

The Hong Kong Management Association

Hong Kong Sustainability Award 2018/19• Certificate of Excellence

(Large‐sized Organisations)

Thank you

These materials have been prepared by Chow Tai Fook Jewellery Group Limited (the “Company”) solely for use at this presentation and are not forpublic dissemination.

The slides and any other materials used in this presentation are the property of the Company and must be treated as such. The information containedin this presentation is being furnished to you solely for your information and may not be forwarded, published or distributed, directly or indirectly, toany other person (whether within or outside your organisation/firm), in whole or in part, for any purpose and may not be reproduced in any mannerwhatsoever. Any forwarding, publication, distribution or reproduction of this document in whole or in part is unauthorised.

The information contained in this presentation does not constitute or form part of any offer for sale or subscription of or solicitation or invitation ofany offer to buy or subscribe for any securities or other interests of the Company or its holding Company or any of its subsidiaries in any jurisdiction oran inducement to enter into any investment activity, nor shall it or any part of it form the basis of or be relied on in connection with any contracts,commitment or investment decision whatsoever.

This presentation contains forward‐looking statements. Such forward‐looking statements are based on a number of assumptions about theoperations of the Company and other factors, many of which may be beyond the Company’s control. By their nature, forward‐looking statementsinvolve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Accordingly, theCompany’s actual results may differ materially from those expressed or implied by such forward‐looking statements. The Company has no obligationand does not undertake to update or revise any forward‐looking statements, whether as a result of new information, future events or otherwise. Theinformation contained in this presentation has been compiled as of the date of this presentation, speaks as of the date of this presentation (or earlier,if so indicated) and will not be updated to reflect material developments which may occur after the date of this presentation, and is subject to change,including substantial changes, without notice.

This presentation may include measures of financial performance which are not a measure of financial performance under IFRS, such as “Coreoperating profit”. These measures are presented because the Company believes they are useful measures to determine the Company’s operatingcash flow and historical ability to meet debt service and capital expenditure requirements. “Core operating profit” should not be considered as analternative to cash flows from operating activities, a measure of liquidity or an alternative to net profit or indicators of the Company’s operatingperformance on any other measure of performance derived in accordance with IFRS. Because it is not an IFRS measure, “Core operating profit” maynot be comparable to similarly titled measures presented by other companies.

The information contained in this presentation has not been independently verified. No representation, warranty, or undertaking express or implied,is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of any information or opinion containedherein. It is not the intention to provide, and you may not rely on this document as providing, a complete or comprehensive analysis of theCompany’s financial or trading position or prospects. None of the Company or any of its directors, officers, employees, agents, shareholders, affiliates,subsidiary, advisors or representatives shall be in any way responsible for the contents hereof, or shall be liable (in negligence or otherwise) for anyloss howsoever arising from any use of this document or the information contained in this presentation or otherwise arising in connection therewith

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