Chow Tai Fook Creation Posts 11% Profit Rise, Announces Bonus Shares and Strategic AI Data Center Expansion
AM730 · 4 SOURCESabout 1 hour ago7 MIN
Summary
Chow Tai Fook Creation (stock code: 659) announced robust full-year results for fiscal year ending June 30, 2026, with profit attributable to shareholders reaching HK$2.393 billion, representing an 11% year-on-year increase . The board proposed a final ordinary dividend of HK$0.33 per share, pushing total annual dividends to HK$0.61 per share including the interim dividend of HK$0.28 already paid . In a shareholder-friendly move, the company recommended issuing bonus shares on a 1-for-10 ratio to improve share liquidity and sustain its dividend policy .
Co-Chief Executive Officer Cheng Chi-ming (鄭志明) stated that the group will seek to increase its net debt ratio from the current low level of 28% back to the target range of 40-45% by pursuing high-return acquisition opportunities, without limiting the scope by industry or geography . The group is actively looking at AI data center and energy storage projects, with its first major commitment being a 40% stake in a Johor, Malaysia AI data center project expected to commence operations in the first quarter of next year .
Key Points
- Full-year profit attributable to shareholders: HK$2.393 billion, up 11% year-on-year; revenue reached HK$27.1 billion with 11% growth
- Total annual dividend: HK$0.61 per share (interim HK$0.28 + final HK$0.33), with final dividend up 4% on comparable basis
- Bonus share issuance: 1-for-10 ratio recommended to enhance liquidity; Co-CEO Cheng stated "more profit means more dividends to shareholders — it's a win-win"
- Financial services segment delivered strong 19% growth in operating profit to HK$1.475 billion, driven by Chow Tai Fook Life with new business value up 30% to HK$1.303 billion
- AI data center investment: 40% stake in Johor, Malaysia project with Phase 1 capacity over 70MW (targeting end-2026 completion), Phase 2 exceeding 100MW
Why It Matters
The group's strategic pivot toward AI data centers and energy storage projects, combined with its willingness to increase leverage back to target levels, signals an aggressive growth strategy that could reshape its business profile beyond traditional financial services and infrastructure . While the near-term impact of mainland China's 20% offshore capital gains tax on insurance products has caused some clients to adopt a wait-and-see attitude, management remains confident that Hong Kong insurance products retain their unique appeal, particularly as US interest rate hikes have widened the yield gap with mainland policies .
The group's strategic pivot toward AI data centers and energy storage projects, combined with its willingness to increase leverage back to target levels, signals an aggressive growth strategy that could reshape its business profile beyond traditional financial services and infrastructure . While the near-term impact of mainland China's 20% offshore capital gains tax on insurance products has caused some clients to adopt a wait-and-see attitude, management remains confident that Hong Kong insurance products retain their unique appeal, particularly as US interest rate hikes have widened the yield gap with mainland policies .