Hong Kong-headquartered Chow Tai Fook Jewellery Group Ltd will open 600-800 new stores on the Chinese mainland in fiscal year 2024, the company's top executives said, following strong resilience in the consumer market over the past three years and an anticipated economic recovery in the coming months.

Up to 40 percent of the new stores to be opened by the financial year ending March 31, 2024 will be directly managed by the company, the group's managing director Kent Wong said.

The management team disclosed the store opening plan at a news conference in Shanghai on Friday.

Despite the impact of the COVID-19 pandemic, Chow Tai Fook managed to open 1,631 retail stores in China in fiscal year 2023, taking the total store count to 7,269. The group has already been ahead of its goal set for fiscal year 2025 — opening 7,000 physical stores on the mainland.

Over the past two years, the jewelry group has opened more than 3,000 new brick-and-mortar stores on the mainland.

"With the optimized COVID-19 control measures, the number of tourists from the mainland to Hong Kong and Macao special administrative regions will also rise this year. Combined with the consumption coupons to be released by the Hong Kong SAR government in the following months, the group's sales revenue will be boosted and normalized in fiscal year 2024," said Hamilton Cheng, executive director and chief financial officer of the group.

Data released by Hong Kong Tourism Board in early June showed that more than 10 million tourists visited Hong Kong in the first five months of this year, 40 percent of the pre-pandemic level. The city received more than 7.95 million Chinese mainland visitors during the same period.

According to the group's financial results released earlier this month, Chow Tai Fook's sales revenue declined 4.3 percent year-on-year to HK$94.7 billion ($12.11 billion) in fiscal year 2023.

The Chinese mainland market has contributed over 86 percent to Chow Tai Fook's income for the past fiscal year. Despite the downward pressure on the renminbi's exchange rate, the company's core operating profit margin remained stable at 10 percent with the gross profit margin improving to 23.7 percent from 23.4 percent, showing strong market resilience, according to the company's executives.

More improvements will be made to further boost its business performance. Cheng said the company possesses over 20,000 stock-keeping units, of which 30 to 40 percent have a relatively lower inventory turnover rate or are less welcomed by consumers. The company will reduce the SKUs to increase the inventory turnover rate, he said.

Meanwhile, the company will roll out products that are currently available only on online channels such as JD or Tmall. There will also be specially designed products available only in brick-and-mortar stores. This will be part of the company's strategy for differentiated product supply, said Wong.

On the recent fluctuation in gold prices, Cheng said 50 to 60 percent of the company's gold reserves are hedged to avoid hurting its profit margin.

Rising gold prices may bring in higher profit margin. Chow Tai Fook will also help 60 percent of its franchisees stabilize profit margins by adopting similar hedging methods, he said.

Chow Tai Fook, which is listed on the Hong Kong stock exchange, was included on the benchmark Hang Seng Index and MSCI China Index in August and November, respectively, last year. This has helped to elevate the stock's liquidity, consolidate shareholder confidence and attract more institutional investors, Cheng said.