Luk Fook Holdings (International) Limited Reports Strong Q4 FY2026 Sales Performance Amid Market Volatility

Key Highlights and In-Depth Analysis for Investors and Shareholders

1. Robust Q4 Financial Performance Surpasses a High Base

• Strong Growth Despite Challenging Comparison: Luk Fook Holdings delivered notable growth in the fourth quarter of FY2026, overcoming the highest comparison base from the same period last year. The Group’s overall Retail Sales Value (RSV) rose by 19% year-on-year (YoY), and retailing revenue surged by 36% YoY. Same store sales (SSS) also increased by 33%, outpacing both the first three quarters of the year and the prior year’s Q4 performance.
• Product Mix Shift: The RSV mix for gold and platinum products jumped to 82% (up 5 percentage points YoY), signifying a strong shift towards investment gold products amid a volatile gold price environment.
• Gold Price Impact: Despite a more than 70% YoY increase in the average international gold price (USD per ounce), SSS for weight-based gold products soared to +42%. Fixed price jewellery SSS climbed +10%, with fixed price gold products up +20% on a high base, though 18K gold diamond products decreased by 9%.

2. Hong Kong, Macao, and Overseas Markets Drive Outperformance

• Outstanding Regional Performance: The Hong Kong, Macao, and overseas segments substantially outperformed the Mainland market. RSV in these markets increased 42% YoY, retailing revenue rose 41%, and SSS leapt 39% (Hong Kong SSS +44%, Macao +34%, Overseas +25%).
• Pricing and RMB Appreciation: Strong local demand, favourable pricing compared to Mainland China, and the RMB’s appreciation drove robust Mainland visitor traffic and sales in Hong Kong and Macao.
• Significant Increases in Selling Prices:
  • In Hong Kong, the average selling price of gold products jumped 45% YoY to HK\$19,400; fixed price jewellery rose 26% to HK\$6,700; fixed price gold products up 35% to HK\$5,800.
  • In Macao, gold products rose 29% to MOP20,200; fixed price jewellery up 21% to MOP8,700; fixed price gold products up 31% to MOP8,900.
  • In overseas markets, gold products rose 48% to HK\$17,500; fixed price jewellery up 38% to HK\$6,200; fixed price gold products up 40% to HK\$5,600.

3. Mainland Market Faces Challenges Amid Growth in E-commerce

• Moderate Growth in Retail Sales: Mainland RSV increased 8% YoY, with gold products RSV up 14% but fixed price jewellery RSV down 15%.
• E-commerce Gains Momentum: Retailing revenue in Mainland (including self-operated shops and e-commerce) rose 20% YoY, and e-commerce sales increased 22%.
• Shop Performance Divergence:
  • Overall SSS (including licensed shops) in Mainland showed double-digit growth, but SSS from self-operated shops was flat (gold -1%, fixed price jewellery -5%).
  • Licensed shops (92% of total Mainland shop count) saw SSS growth of +11% overall, +18% for gold products, and -12% for fixed price jewellery.
• Rising Average Selling Prices: Gold products’ average selling price (inclusive of VAT) increased 36% YoY to RMB10,300; fixed price jewellery up 19% to RMB3,100; fixed price gold products up 23% to RMB2,700.

4. Strategic Shop Network Adjustments

• Net Shop Reduction but Overseas Expansion: The Group’s total shop count declined by 68 in Q4 to 3,005 globally, due mainly to rationalization in Mainland. However, overseas expansion continued with 20 new shops opened over the year (net increase), achieving the full-year target and highlighting management’s focus on international growth.
• Network Composition as of 31 March 2026:
  • “Lukfook Jewellery”: 155 self-operated shops worldwide (71 in Mainland, 48 in Hong Kong, 17 in Macao, 19 overseas), plus 2,341 licensed shops in Mainland and 28 overseas.
  • “3DG Jewellery”: 158 self-operated shops (152 in Mainland, 6 in Hong Kong), with 101 licensed shops in Mainland and 1 overseas.

5. Outlook and Potential Price-Sensitive Issues

• Gold Price Adaptation: Despite gold price volatility, consumer demand remained resilient as buyers adapted to the higher price environment, resulting in minimal sales impact.
• Mainland Policy Impact: New value-added tax policies on gold in the Mainland widened the price gap with Hong Kong/Macao, encouraging Mainland consumers to shop in these markets. This dynamic could continue to boost Hong Kong and Macao sales but may pressure Mainland performance.
• Risks and Opportunities: The Board cautions that geopolitical risks remain high and Mainland macroeconomic recovery is unclear. However, the Mainland government’s ongoing supportive measures for domestic demand, the property market, and capital markets offer medium- to long-term growth potential.
• Accelerated Overseas Expansion: The Group plans to further accelerate overseas expansion in the coming year, signaling a strategic pivot toward international growth opportunities, which could be a significant share price catalyst if successfully executed.

6. Shareholder Information and Board Statement

• Investors should note that all operational data in the announcement are based on unaudited internal records. The Board urges caution when dealing in the Company’s shares.
• The current Board composition is detailed, with Wong Wai Sheung serving as Chairman & CEO, alongside a mix of executive, non-executive, and independent non-executive directors.

Conclusion: Key Takeaways for Investors

Luk Fook Holdings delivered a strong Q4 FY2026 performance, notably in Hong Kong, Macao, and overseas markets, despite a challenging macroeconomic environment and high comparison base. The Group’s continued shift toward gold products, solid SSS growth, rising average selling prices, and strategic focus on overseas expansion are all crucial trends for investors. Shareholders should carefully monitor Mainland policy developments, the pace of overseas expansion, and ongoing geopolitical risks, as these factors may significantly impact future share price performance.

Disclaimer: The above article is for informational purposes only and does not constitute investment advice. All operational and financial data referenced are unaudited and subject to future revision. Investors should exercise caution and consult professional advisors before making any investment decisions related to Luk Fook Holdings (International) Limited.

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