Chow Tai Fook Shares Surge 15% in a Single Day as Gold Prices Drive Annual Shareholder Profit Up Over 50%
Miles Bennett
Chow Tai Fook (01929.HK) reported a record full-year net profit of HK$9 billion — up over 50% — sending shares up 15% in a single session; gold-price tailwinds and premium jewelry demand drove the beat, but with gold already down ~20% from its peak, the outlook carries a clear variable.
How strong was the scorecard?
For the fiscal year ending March 2025, Chow Tai Fook posted net profit attributable to shareholders of HK$9 billion (~US$1.15 billion), up over 50% year-on-year — an all-time high.
Operating profit reached HK$18.9 billion, up 27.8%.
This means → profit grew far faster than operating income, signaling that higher gold prices didn't just lift revenue — they widened margins significantly.
How exactly did rising gold prices boost profit?
CFO Karen Yih told CNBC that gold-price appreciation directly lifted gross margins on weight-priced gold jewelry.
In plain terms = Chow Tai Fook prices much of its gold jewelry by weight. When gold rises, the same necklace sells for more, while processing costs barely move — the gap is pure extra margin.
This reflects a natural "profit amplifier" that jewelry retailers enjoy during gold-price upswings.
Gold alone wasn't enough — what was the other growth engine?
Karen Yih said fixed-price, design-driven jewelry delivered "extremely strong sales," with robust demand in China's higher-tier cities and international markets.
This means → these products are priced independently of gold, carry higher and more stable margins, and serve as Chow Tai Fook's key hedge against gold-price swings.
She added that "even when gold prices fluctuate, demand for these pieces tends to be more resilient."
What does Citi expect next?
Citi noted that Chow Tai Fook's FY2027 sales and margin guidance both topped market expectations.
Same-store sales growth in April and May also beat forecasts, helped by a recovery in weight-priced gold jewelry demand during a gold-price pullback.
Citi expects net margins to improve further in FY2027 as the company expands its premium and directly operated stores and rolls out a signature jewelry line.
Where is the biggest uncertainty?
Gold prices surged in late 2025 through early 2026 on haven demand driven by macro and geopolitical uncertainty, but have since fallen roughly 20% since the outbreak of the Iran war.
This means → Chow Tai Fook's "profit amplifier" on weight-priced products is now running in reverse — lower gold prices mean lower selling prices and thinner margins.
In plain terms = a significant share of the past year's profit surge was a gold-price tailwind. Whether that wind keeps blowing is the single biggest variable ahead.
Content is for reference only, not financial advice.