Key Financial Highlights

• Turnover: Up 6% to HK\$22.45 billion, driven by resilient demand for high-end jewellery and successful product mix realignment.
• Net Profit: Surged 115% to HK\$1.66 billion attributable to owners, marking a new record high for the Group.
• Earnings Per Share: Increased by 115% to HK255.7 cents.
• Dividend: Total dividend per share up 96% to HK100 cents. Notably, the company is replacing the traditional final dividend with a second interim dividend, maintaining the total payout but adjusting timing and structure.
• Gross Profit Margin: Improved significantly to 32.6% (2024: 28.3%), a 4.3 percentage point increase, primarily due to higher gold prices and an optimized sales mix favoring higher-margin fixed-price gold jewellery.
• Retail Segment Results: Up 141% to HK\$2.70 billion, reflecting robust operational execution and cost discipline.

Strategic and Operational Developments

• Product and Brand Strategy: The Group pivoted towards high-end, fixed-price gold jewellery, balancing out weakening demand for diamonds and softer sales volumes overall. High-end segments showed resilient demand, and premium offerings were elevated to attract both traditional and new-generation consumers.
• Cost Efficiency: Selling, distribution, and administrative expenses fell 6% due to ongoing optimization and rationalization of the retail network, leading to improved shop-level returns and overall profitability.
• Inventory Management: The company emphasized disciplined inventory control, particularly important amid volatile gold prices and geopolitical tensions.
• Network Optimization: The group continued to upgrade and prune its store network, focusing on locations and formats that yield optimal returns.
• Standalone Sustainability Report: 2025 marked the publication of the company’s first independent Sustainability Report, highlighting achievements in ESG and compliance. This underscores the Group’s commitment to transparency and responsible practices—a factor increasingly important to institutional investors.

Capital Structure, Dividends, and Shareholder Returns

• Dividend Policy Change: Effective 2025, the Group has shifted to paying two interim dividends each year, with the second interim dividend in lieu of a final dividend. This change does not affect the total annual dividend but may impact timing of shareholder returns.
• Dividends Declared: First interim dividend of HK21.0 cents paid in September 2025; second interim dividend of HK79.0 cents payable in May 2026. The Board targets a dividend payout ratio between 30% and 40% of consolidated net profits.
• Share Buyback: The company repurchased and canceled 1,008,000 shares during 2025, signaling confidence in its valuation and commitment to shareholder value enhancement.
• Net Gearing: Increased to 44.5% (2024: 29.7%), reflecting higher bullion loan balances and expanded operations. The Group maintains healthy liquidity and remains within comfortable leverage levels.
• Distributable Reserves: HK\$1.41 billion at year-end, with HK\$530.7 million declared as the second interim dividend.

Risk Factors and Market Outlook

• Geopolitics and Price Volatility: 2025 was marked by global instability, including US-China trade actions and war in the Middle East. The gold price rose 65% during the year, creating both opportunities and challenges for inventory and margin management.
• 2026 Outlook: The Chairman warns of an even more challenging environment, with persistently high oil and gold price volatility. The Group plans to focus on prudent inventory management, cost control, further network optimization, and lean operations targeting high-margin segments.
• Risk Management: The Group has robust internal controls, with regular risk assessments, strong compliance, and financial hedging to mitigate interest rate, currency, equity, and commodity price risks.
• No Material Contingent Liabilities: As of year-end, no significant contingent liabilities or asset pledges were reported.

Corporate Governance and Other Shareholder Information

• Board and Management: The Board underscores its focus on leadership, oversight, and strategic direction. All Directors comply with the Model Code on securities transactions, and robust internal guidelines and continuous professional development are in place.
• Audit and Remuneration: Ernst & Young re-appointed as auditor. No director was granted or exercised options; no equity-linked agreements other than the share option scheme exist.
• Major Customers and Suppliers: Purchases from the top five suppliers accounted for 74% of total purchases, with the largest representing 53%. No director or major shareholder had beneficial interests in these suppliers.
• ESG and Compliance: The group’s new standalone Sustainability Report details its environmental and social achievements, available on the corporate and HKEX websites.

Potential Price-Sensitive and Shareholder-Relevant Issues

• Record Profit and Dividend Payout: The surge in profit and dividend signals strong operational execution, likely to support share price momentum.
• Dividend Policy Change: Moving to two interim dividends per year may affect the timing of cash flows to shareholders and institutional investors. This is a structural change that should be noted by all shareholders.
• Share Buyback: The company’s repurchase and cancellation of its own shares points to confidence in the Group’s intrinsic value and may provide upward support for the share price.
• Exposure to Gold Prices and Geopolitical Risks: As a jewellery retailer heavily exposed to gold price trends, further volatility could impact future earnings and valuations. The Group’s hedging and inventory management strategies are crucial in mitigating these risks.

Conclusion

Chow Sang Sang Holdings has delivered a standout financial performance in 2025, with record profit, a higher dividend, and a strategic realignment toward high-margin gold jewellery. The company’s new dividend policy, robust risk controls, and active capital management (including share buybacks) are all positive signals for shareholders. However, the outlook remains challenging due to macroeconomic and geopolitical headwinds, and investors should closely monitor developments in gold prices, consumer demand, and the Group’s ongoing network and product optimization efforts.