Good morning, everyone. I'm Joanne from Luk Fook IR team.

Thanks for taking the time to join us today for our financial year 2026 interim results. It's great to have you all here with us.

Joining me today is Dr. Kathy Chan, our Executive Director and Group CFO.

Kathy will take you through the interim results. After that, we will move straight into the Q&A session.

The call will be conducted in English, and the presentation deck is already available for download on our website. With that, let me hand over to Kathy for the detailed presentation.

Kathy, please. Thank you, Joanne.

Good morning, ladies and gentlemen. Thank you for joining Luk Fook's FY2025/26 interim results presentation.

I would like to start with looking at our financial highlights, followed by financial review, and then our future plans and strategies. The details will be covered in the corporate presentation that has been uploaded to our website.

Let's look at slide 4 about the financial highlights first. Despite sustained geopolitical tensions and trade uncertainties and clouding the macroeconomic outlook and driving gold prices continued to move upward, the group's performance across all regions remained outstanding.

Underpinned by effective product differentiation and sales strategies, with a surge in sales of fixed-price jewellery products, the group's revenue increased by 25.6% to HK$6.8 billion, compared to the same period last year. In addition, the favorable operating leverage effect lifted the operating profit margin by 1.6 percentage points to 11.4%, thereby boosting the operating profit by 45.4% to HK$780 million.

The group's profit attributable to equity holders increased by 42.5% to HK$619 million. The basic earnings per share rose by 41.9% to HK$1.05.

Proposed interim dividend is HK$0.55 per share with dividend payout ratio of 52%. There was a net decrease of 174 shops globally, including a net decrease of 173 Luk Fook shops and one 3D-GOLD jewellery shop.

Next slide shows the movement in operating profits. Benefited from the rising gold prices and the increased sales mix of fixed-price jewellery products with high gross margin, the group's overall gross margin increased by 2 percentage points to 34.7%.

In fact, this gross margin is our record high for both interim and annual results. As a result, the group's gross profit increased by 33.2% to HK$2.37 billion.

The operating expenses increased by 12.4% to around HK$1.3 billion. Thanks to revenue growing at a faster pace, the group benefited from operating leverage, with the TOE ratio improving by 2.2 percentage points to 19.1%.

The surge in gold prices resulted in the widening gold hedging losses of HK$409 million during the period. As a result of all the above, the operating profit rose by 45.4% to HK$780 million.

Now let's go into the details of our financial performance. On slide 9, our inventory balance grew to around HK$12.3 billion as at end of September 2025.

The increase was mainly due to the rise in gold products category. Therefore, both the average and closing inventory turnover days increased by over 60 days year-on-year, reaching a total of over 490 days by end of September 2025.

However, if comparing to first half of financial year 2025, the average inventory turnover period actually dropped by 14 days. Net borrowings increased by 282% to around HK$1.1 billion, mainly due to the increase in gold loans.

Our ROE rose by 2.5 percentage points to 9.1%. Now let's look at slide 12 for the performance analysis by market.

Revenue from the Hong Kong, Macau, and overseas market increased by 9.9% to HK$3.86 billion during the period under review, accounting for 56.4% of the group's revenue. Its segment profit increased by 37.3% to HK$587 million, accounting for 68.2% of the group's total, while its segment profit margin was 15.2%.

The wholesaling business in the Mainland market showed a significant improvement in first half of the financial year. As a result, revenue from the Mainland market increased by 54.2% to HK$2.98 billion, accounting for 43.6% of group's total revenue.

Its segment profit increased by 118.2% to HK$274 million, accounting for 31.8% of group's total, and its segment profit margin was 9.2%. Slide 13 shows our revenue and segment profit by business.

Retailing business was the main source of revenue of the group. The group's retailing revenue increased by 12.8% to HK$5.26 billion, accounting for 76.8% of group's total revenue.

Its segment profit increased by 24.6% to HK$477 million, accounting for 55.4% of the total, and its segment profit margin was 9.1%. Driven by the group's ongoing efforts to broaden product categories under wholesaling business, coupled with successful product differentiation strategy, the new products achieved incredible sales performance.

Therefore, the group's wholesaling revenue significantly rose by 190.6% to HK$1.12 billion, accounting for 16.3% of the group's total revenue. Its segment profit turned around from a loss to a profit of HK$108 million, accounting for 12.5% of the total, and its segment profit margin was 9.7%.

As the segment profit of wholesaling business included profits from inter-segment sales to self-operated shops, if including inter-segment sales in the denominator, its segment profit margin would be 4.4%. Licensing income increased by 16.6% to HK$471 million due to the increased sales in the Mainland, accounting for 6.9% of group's total revenue.

Its segment profit margin was 58.6%, while its segment profit increased by 15.5% to HK$276 million, accounting for 32.1% of the total. Let's look at the product analysis on slide 14 now.

During the period under review, the average international gold price in US dollar per ounce increased by nearly 91% year-on-year, leading to a decline in gold sales by weight. As a result, sales of gold and platinum products increased by 11% only to around HK$4.1 billion, accounting for 64.3% of overall sales amount.

Its gross margin increased by 2.8 percentage points to 30.3% because of rising gold prices. Gross profit from gold and platinum products therefore increased by 22.3% to HK$1.24 billion, accounting for 59.7% of the overall gross profit.

On the other hand, the sales of fixed-price jewellery products increased by 67.9% to around HK$2.28 billion, accounting for 35.7% of the overall sales amount. Nevertheless, due to a significant increase in the mix of wholesaling revenue from fixed-price jewellery products, which has lower gross margin than retailing, gross margin for fixed-price jewellery products therefore decreased by 7.5 percentage points to 36.8%.

Its gross profit, however, increased by 65.6% to HK$838 million, accounting for 40.3% of overall gross profit. Now let's look at slide 16 for performance in Hong Kong, Macau, and overseas market.

Retailing revenue from the Hong Kong, Macau, and overseas market increased by 8.9% to HK$3.7 billion, accounting for 97.7% of this market's total and 54.7% of group's total revenue. Its segment profit increased by 17.4% to HK$491 million, accounting for 83.6% of this market's total and 57% of group's total, with segment profit margin of 13.1%.

Moreover, due to the addition of five overseas licensed shops during the period under review, wholesaling revenue increased by 89% to HK$81 million, accounting for 2.1% of the Hong Kong, Macau, and overseas market's total revenue and 1.2% of the group's total. Its segment profit was HK$62 million, accounting for 10.6% of this market's total and 7.2% of the group's total.

Its segment profit margin was 76.2%. As the segment profit of wholesaling business included the profit of inter-segment sales to self-operated shops, if including inter-segment sales in the denominator, its segment profit margin would be 5%.

On the other hand, Hong Kong licensing income increased by 3.8% to HK$33 million, accounting for 0.9% of this market's total and 0.5% of the group's total. Its segment profit increased by 5.9% to HK$34 million, accounting for 5.8% of this market's total and 4% of the group's total.

Its segment profit margin was 103.2%. Now let's look at slide 17 for performance in Mainland market.

The retailing revenue in Mainland increased by 23.6% to HK$1.5 billion, accounting for 50.6% of Mainland market's total and 22.1% of group's total. However, due to segment losses in 3D-GOLD's Mainland retailing business as a result of gold hedging losses, the group's retailing business in Mainland recorded a segment loss of HK$14 million, accounting for -5.2% of Mainland market's total and -1.6% of the group's total.

Its segment profit margin was -0.9%. Actually, more than half of the gold hedging losses actually incurred in September 2025.

If the impact of gold hedging losses is excluded, the Mainland retailing business would have recorded a segment profit of HK$182 million. For the gold hedging losses, because it happens in the later part of the first half period and because 100% of the P&L impact need to be recorded, but actually the appreciation of value in the closing inventory cannot be booked because we can only book the profits or the appreciation in value of the inventory after it's sold.

Most likely all these kind of hedging losses would be offset by the actual sales in the second half of the financial year. We are not that worried about the high hedging loss at the moment.

Attributed to the expansion of product categories in the wholesaling business, coupled with robust sales performance of this new product, the group's revenue of the wholesaling business rose significantly by 203.4% to around HK$1.04 billion, accounting for 34.7% of the Mainland market's revenue and 15.1% of group's total. Its segment profit was HK$46 million, accounting for 16.8% of Mainland market's total and 5.3% of group's total.

Its segment profit margin was 4.4%. As the segment profit of wholesaling business included profit of inter-segment sales to self-operated shops, if including inter-segment sales in the denominator, its segment profit margin would be 3.8%.

Licensing income in the Mainland market increased by 17.7% to HK$438 million, which accounted for 14.7% of Mainland market's revenue and 6.4% of group's total. Its segment profit increased by 16.9% to HK$242 million, accounting for 88.4% of Mainland market's total and 28.1% of group's total, and its segment profit margin was 55.3%.

Turning to slide 19, which shows the breakdown of retailing revenue by region. The group continued to actively expand into overseas market and entered into the Vietnam market for the first time during the period under review.

Revenue from the overseas market rose by 58.4% to HK$482 million, accounting for 9% of the group's retailing revenue, a 3 percentage points higher mix than same period in prior year. Slide 20 shows the achievements of our e-commerce business in Mainland.

Its revenue increased by 12.1% to HK$843 million, accounting for 55.8% of retailing revenue Mainland and 16% of the group's retailing revenue, with ASP increased by 33.3% to RMB2,800. Now let's turn to slide 26.

Even though TOE rose by 12.4% to HK$1.3 billion, revenue growth outpaced this increase. As a result, TOE to revenue ratio improved by 2.2 percentage points to 19.1% as compared to the same period of last year.

Then when you look at the table underneath the bar charts, actually you can see that the rental expenses, overall speaking, actually increased by 8% only in the first half of the financial year. Actually, we have 27 renewals out of 69 shops in first half of financial year 2026, with overall rental decrease of more than 25% in renewal.

Let's turn to slide 28 for capital expenditure. We did not have any significant capital expenditure in first half of FY2026.

Then now let's look at the group's future plans and strategies. The group has set up its new three-year corporate strategies, starting from FY2025/26, with overseas market expansion, market-oriented products, and operational efficiency enhancement as its three main focuses so as to foster its future business growth.

On slide 31, you can see that actually we can see a significant growth potential in overseas markets. We will therefore continue to allocate more resources to actively expand our global footprint and keep opening new shops overseas.

The group entered the Vietnamese market for the first time in the first half of this financial year, and currently our group's footprint spans 12 countries and regions, with the goal to enter at least three additional countries and net add 50 new overseas shops within three years from this financial year to the financial year ending March 2028. In fact, although we talk about net addition of 50 overseas shops in three years' time, but actually I highly likely that in the next financial year we would have exceed this 50 overseas shop addition already.

That means by two years' time we should be able to achieve three-year target. In slide 32, you can see our network expansion plan and capex for FY2026.

We plan to have a net addition of around 20 shops in overseas markets this financial year. Far we have already opened eight new shops in the first half.

For the Mainland market, we don't have a net addition plan, although we have that at the beginning of the financial year. Because of the actual situation, we expect there will be a net reduction of around 200 shops for the full year.

The capex budget for 2026 is around 100 million, which will be used for shop, office, and plant renovation, as well as purchase new equipment for office. Then let's look at slide 37, which covers our second strategy, focusing on market-oriented products.

In response to the trend of polarized consumption, we are extending our focus to both premium and affordable luxury segments. We continue to optimize our product mix, launch concept stores, and enhance product in-store merchandising.

We'll keep sharpening our product differentiation by telling stronger brand stories and values, blending unique design with cutting-edge craftsmanship, offering personalized customization, launching IP collaboration projects, and upholding top quality standards. With efficient product management and tightly aligned sales and marketing, that will push hot sellers and grab every sales opportunity to maximize volume.

At the same time, we'll stay agile on inventory, fine-tune the product mix, and flexibly adjust to whatever the market demands. Last but not least, slide 38 shows our third strategy: operational efficiency enhancement.

We'll boost productivity by streamlining supply chain management, rolling out full automation, big data analytics, and AI applications, and strengthening cross-departmental collaboration and agile project management. We'll also maximize employee productivity by building a culture of continuous improvement and innovation, upgrading our training programs, and sharpening our performance management system.

Now let's shift to the group's branding and promotions. We have integrated strategies to attract target customers and to foster high customer loyalty.

This slide is showing that in order to meet increasingly diverse customer needs, we continue to deepen our multi-brand strategy by building a clearly differentiated brand portfolio that precisely targets different segments, to fully leverage each brand's unique strengths to drive synergies and stronger growth. On slide 41, we have invited famous actor Chan Yi as the global brand ambassador to rejuvenate the brand image and tap into his massive worldwide fan base.

On slide 42, you can see we have our signature collection, Diabling - Shimmering Gold, feature CNC color-radiating finish, 360-degree filigree, and precision laser cutting to deliver a stunning multifaceted sparkle on gold. Since launch, it has been extremely well received, with total sales exceeding 230,000 pieces.

On the next slide is another signature collection, Fulu, which symbolizes fortune and prosperity. We launched a series of promotional campaigns to make slogan "Get Fulu at Lukfook" truly resonate with consumers and take root in their hearts.

On slide 44, Heirloom Fortune Collection, another signature line, using exquisite antique gold craft, mother-of-pearl inlay, and gilt coloring, brings traditional culture to life with timeless heritage-style gold pieces. We held roadshows of Charm of Song Dynasty in Beijing and Dalian in May 2025.

On the next slide, Love is Beauty, a natural diamond collection that has been launched for over 14 years. It has become deeply ingrained in consumers' hearts.

On slide 46, we further strengthened our leadership in the Guochao category through three IP collaborations with Tang Palace Cultural Creation. One of the theme, Night Banquet in Tang Palace, a top 10 national IP of 2021, was launched in September 2025 with over 140 new products.

The other two collaborations will roll out in 2026. Next slide, following the hugely successful 2024 collaboration with the phenomenon film Ne Zha, we launched a new series tied to the global hit Ne Zha 2.

On the other hand, we collaborated with Sanrio for over 10 years to create numerous jewellery products of the ruler Kuromi. On slide 48, for the 24th year, Lukfook Jewellery served as the official sponsor of the crown and jewellery for the Miss Hong Kong Pageant.

Lukfook also introduced Love Yourself Collection and limited edition 18K gold diamond crown to strengthen its brand image connected with beauty. We also co-launched new products with Exquisite Art, founded by renowned Chinese sculptor Xu Guangsheng, Xu Guangci.

On the next slide, to celebrate anniversary, we launched a brand-new Fun Nut Collection gold jewellery and kick-started a series of promotions. Slide 50 shows some VIP figures.

Our membership base increased 20% to reach over 9 million in first half of financial year 2026, with members contributing 78% of our total retail sales. Member spending in first half surged 41%.

Slide 50 highlights the results of our VIP Thankful Month. We rolled out a series of online and offline incentives that successfully attracted new customers, boosted engagement, and drove strong in-store sales.

Member contribution to group's retail sales during VIP Thankful Month rose 9 percentage points year-on-year. Over 1 million people engaged with our WeChat mini program.

126,000 customers checked in at our stores. On slide 52, we invited celebrities for short- to long-term marketing campaigns to raise brand awareness and recognition among our target customers of different brands and product collections.

Slide 53, we co-organized promotional activities with various reputable partners, including King Pro League, Blue Girl, China Everbright Bank, and Starbucks to expand our brand exposure to target customers. Effective sustainability governance is a crucial factor in driving long-term success of the group.

Therefore, we are committed to integrating ESG principles into our corporate planning and operational decision-making processes. We are honored to have received 12 awards in first half of financial year 2026.

Gold prices hit new highs again starting in September 2025. Although sales were impacted during first week of September, they began to gradually recover from the second week onward, indicating that consumers had gradually adapted to higher gold prices.

From 1st of October to the first three weeks of November 2025, the group continued to record satisfactory sales growth across all markets. Same-store sales in both Hong Kong, Macau, and overseas market and the Mainland market recorded double-digit growth.

The Mainland market exhibited significant improvement compared to the second quarter of the current financial year, while performance in Hong Kong, Macau, and overseas market remained broadly in line with that of the second quarter. Following the implementation of new value-added tax policy for gold in Mainland, the gold raw material procurement costs have increased, which in turn drove up the cost of gold products.

Fortunately, the aforesaid factors did not materially dampen consumer demand for gold products in Mainland. During the period from 1st to 21st November 2025, overall same-store sales growth in the Mainland market, covering both self-operated shops and licensed shops, as well as in the Hong Kong, Macau, and overseas market continued to achieve double-digit growth.

This concludes my presentation. Thank you.

Thank you, Kathy. Now we can move into the Q&A session.

Hi, Kathy and Joanne. Thanks very much for a very good presentation.

May I just check on a few questions? The first, I actually want to check a little bit further in terms of our double-digit growth in October and November 21st.

Is it possible to compare a bit in terms of our November sales momentum versus October in terms of the strength of the double-digit growth? My question on the second question is that what about our sales momentum by products for November so far?

Talking about fixed-price gold products, weighted gold products, and gem sets overall? My third question is that given the strong set of interim results, could we check on our latest same-store sales growth and margin guidance for the full year of FY2026?

Thank you.

Maybe I answer the margin margin queries first. Actually, especially in the Mainland China, because of that new VAT policy, actually we have to increase our selling price quite soon after the new policy became effective.

That's why, actually for those products actually we is is is before that policy was released, so that means that the cost would be a bit lower because no no that additional VAT amount inside. Therefore, in the first a first few months, I guess first few months after this new law new policy, actually we should be able to enjoy a even higher gross margin than before because of that because of the low low cost.

That's why for the gross margin, like in October and November, we can see that it's much higher, increased in terms of percentage points than the months before in the first half. That means that overall speaking, it's it's likely that I'll talk about retail sales only, it's likely that we may enjoy a even higher gross margin in the second half than the first half.

This is the the first the first answer to your queries. Then when we talk about October to November, actually, when you talk about the Mainland market, the performance is really good.

Actually from 1st of October to November, overall speaking, when we talk about a combined combined same-store sales figure for both operated and self-operated and licensed shop is actually exceeding 40%. Then for but for self-operated shops, it would be around mid-teen.

For licensed shop is more than 40%. We've mentioned quite a number of times in different analyst meetings that the reason for lower performance for the self-operated shops was mainly because we we are more conscious on the more conscious on the the the margin control.

That's why we we have less promotions done in in our self-operated shops than the the licensed shops. Then actually we've got when we talk about the product by product situation, actually we can see that we have we have fixed-price jewellery products are growing faster than the selling gold gold sales by weight type of product, mainly because we've got a very good we still have very good increase in the fixed-price gold products.

Then and then if talking about November itself, from 1st of 1st from 1st of November to to 21st, actually there would be some seasonal effect in inside too, because October, is a we've got we've got like like like the the National Day holidays. Basically in November with this new launch, actually we can see that we have a bit lower performance than the than the October figures, but still exceeding 30% overall speaking for for the Mainland market.

Then when we look at the look at the the performance, actually we have the interestingly, actually we have gold sales by weight increasing faster than the the sales by the sales of fixed-price jewellery products in terms of same-store sales. That's the situation for for the Mainland market.

Yeah.

Thank you, Kathy. Can I just follow up because I'd hope to seek your guidance on our same-store sales growth for the second half of this financial year?

Also just to follow up on the sales performance for November, have we been seeing more purchases in Hong Kong, Macau given the latest policy change for the VAT redemption in China? Thank you.

Now, interestingly, actually at the beginning, we expect to see a better performance in in Hong Kong because of that change in VAT policy. In fact, it's not the it's not that case.

Actually, we can see very good performance in Macau, but not in Hong Kong. It's very strange.

Still, we can see that Hong Kong, we have like when you look at the the November figures in we we when we look at the the actually it's mainly the Macau market that's having a very good performance, exceeding 30% same-store sales growth, but then, I mean in November, but then for Hong Kong is only a single digit, while in overseas, we with we have we have double digit as well. Hong Kong, surprisingly, is not not as expected performing better than the other market.

It's actually the other markets are performing better.

Right, I see. Overall speaking, are we changing our guidance on same-store sales growth for second half?

Now,

actually, for same-store sales growth, we have a higher base in the second half. Original, we expect the second half maybe having a lower growth than the first half.

In fact, when we looked at the October and November figures, up to now, we can see quite strong growth, actually, in the latest months. Basically, I guess maybe we should expect because we actually, overall speaking, we have a double-digit same-store sales growth in quarter two already.

I guess we should expect a double-digit growth to continue in the second half of the year.

Right. Thank you.

Congratulations for very strong results. Thanks, Kathy.

Thank you.

Hi, Kathy and Joanne. Thanks for the presentation.

Just have a follow-up question on the GP margin guidance. If the gold price maintain at the current level and you still have a lower-cost inventory, but when there's a high-cost inventory coming in, what do you think of the GP margin maybe for next year?

If the gold price become very stable, no change, of course, we would go back to standard margin. The standard margin for gold, should be something like 20 23%, something like that.

23%, as overall for the

group, right? The standard margin.

No, for gold selling by weight only. Oh.

Then, many experts are still expecting gold price to go up in the coming year.

Okay. The higher...

Then... Sorry, please go ahead.

Oh, no, I just want to remind you that we have a record high gross margin in this first half already. I guess maybe with the latest development, maybe we'll still have a record high gross margin in the second half.

Yeah. Just want to double confirm the higher gross margin in second half is because of the price increase after the VAT policy change, right?

Yes.

Thank you. Do you have a updated guidance for the gold loan hedging loss for the second half?

Now, actually, in this first half, we don't really put too much focus on the hedging loss because our revenue and profits are rising, so that means and the hedging loss is actually not that impacting our overall performance so severely as like last year. Basically, even though we talk about if gold price keeps on rising, we would have expanded hedging loss, but then our sales would benefit from that with higher margin.

Then, overall speaking, we've hedged only about 20 25%. That means 75% without hedging.

For that 75%, we would enjoy additional profits from the rising gold price.

Okay. Your assumption for the second half gold price is $4,100, 10% higher than the end of September?

Is that correct for your GP margin guidance?

What do you mean? 10%, what was that 10% increase?

What do you mean?

Do you have assumption for the gold price in second half to derive your GP margin guidance?

We don't normally forecast the gold price. Gold price fluctuation is very hard to predict.

Basically you assume the gold price maintain at current level, right?

When we talk about forecast or when we talk about budget, we always assume the gold price to be stable.

Understood. A second question is regarding the wholesale revenue, the very strong performance in the first half.

Can you give us some more color for the driver behind and what is the outlook for second half and going forward?

In fact, when you look at the wholesaling business, in the past, we sold mostly diamond sales, 18-karat gold diamond sales. Within the COVID period, start to drop, the demand dropped quite severely and it's kind of a double-digit drop every year since COVID period.

That's why in the past years, you can see few few years' time, we can we can see that the wholesaling revenue in Mainland was continued to drop. In this year, we have changed our our policy, this our policy or strategy in terms of wholesaling business.

We we try to shift those kind of exclusive type of products or promotional types of products into the wholesaling business so that the licensed shops are not buying these type of products directly from the suppliers, they are buying from us. That's why you can see such a huge increase in the wholesaling revenue.

We will keep on doing that in in the future.

Okay. Understood.

Finally, I just want to follow up the November same-store sales growth and why do you think the demand behavior is so resilient after the price increase? Is any observation you have on the ground?

In fact, I think this new change actually hit those very small retailer, especially those relying on price-cutting. Basically, price-cutting on gold selling by weight.

I think this change in policy actually drove out all these types of retailers quite seriously. Then seems that people are going back to us to buy those gold products by selling by weight.

I guess it's because of that. That's why we can see very strong performance of gold sales by weight after this change in VAT policy.

Okay. You gain a lot of share from those smaller players.

Yes. Okay.

Do you think this is sustainable in the coming months, or it's just a one-off shift?

Up to now, we can still see very strong performance, I think it's fine.

Great. Thank you, Kathy.

I have no more questions. Thank you.

In fact, we have mentioned in the presentation that we expect for the full year we would have a net reduction of around 200 shops altogether for the full year. Basically, it will be mainly licensed shops in Mainland.

You can see that we have a net reduction 174 already in the first half, so that means that in second half it will be much less than the first half. Basically, and then in our latest planning, actually we expect to see or we target to see a net addition again in the next financial year.

That's what we are targeting at the moment. Of course, for this future year targets, it will be updated in our final result announcement in June next year, 2026.

Basically, at this moment, we are still optimistic about the future growth in terms of network expansion in the next financial year. Yeah.

Then for the second half, yeah, you've talked about store, sorry?

Guidance for second half of '26.

In terms of shop closure, I think it will be much less in the second half, much less than the first half, yeah. Okay?

Is that okay?

Hi, Kathy. Just have a few more questions here.

It seems that the gold price ramped up even faster in October and November as compared to the first half. If that's the case and if the market estimates that, going forward into 2026 calendar year, the price could be stronger, would there be any measures that we could adopt to mitigate our hedging loss, such as playing down a bit our gold hedging ratio?

That's my first question. Then second one is that among our fixed-price gold product offerings, which product series were our top one to two performers, and by how much had they contributed to our interim results?

Then my third question is that on our slide 31, we mention a target to enter three more new markets during the latest three-year plan. Do we have any idea right now that in terms of where these three regions will be?

By the way, with the plan for net addition of 50 stores in overseas markets for three-year, which regions could be focusing more on our store expansion? Thank you.

Okay.

Actually, our hedging ratio is already the lowest amongst all our peers, and we haven't changed that ratio for many, many years because we believe that gold price would go up in the long, long term. Long, long term means not only talking about decades with the 's' after decade.

Basically, this is a policy, and we won't change our policy too frequently because it's something long term. Unless there will be some fundamental changes happening, but we don't see that to happen.

Basically, we don't foresee any change in our hedging ratio at the moment. For the fixed-price jewellery products, I guess the best sellers would be those on our fixed-price gold products with diamonds, and then second one would be those without diamonds, especially the Diabling Collection.

Then for the new markets, actually, we have some new markets in mind already, some in Europe and some in Southeast Asian areas. Basically, we have that in mind and in plan already.

I guess in next year because we have entered one new market already, that's Vietnam. Then there would be at least two more countries entering in next year, we will announce that once everything is confirmed.

Then for the net additions, I guess for self-operating shops, we would add more like in US, Australia, Malaysia, because actually we've got self-operating shops in four overseas countries only, that's US, Canada, Australia, and Malaysia. We would continue to add more in self-operating shops in these four countries.

Maybe in some European countries as well. Then but for the additions, mostly they will be licensed shops.

Licensed shops, we would mostly open in Southeast Asian countries.

Right, I see. Thank you.

How is the margin compared for overseas markets overall versus our group level? Is it possible to...

Actually, they have similar margin level like Hong Kong, Macau market, and actually sometimes they perform even better than Hong Kong, Macau market in terms of profit margin. Especially they have a high gross margin than all the other than those margins in Hong Kong, Macau and Mainland.

Right. That's very good update.

Thank you, Kathy. Thank you.

Thank you, Ray, and thank you, Kathy. That's all the questions we have today, and so we come to the end of our conference.

Thank you once again for joining us. If you need an audio replay or any assistance, please contact us at [email protected].

Wishing you all a wonderful day ahead. Goodbye.