Jewelry giant Chow Tai Fook's shares rise 15% as higher gold price boosts profits

Shares of jewelry giant Chow Tai Fook surged 15% on Friday after it posted a record high performance in its financial year to the end of March.

The Hong Kong company achieved a record high profit attributable to shareholders of $9 billion Hong Kong dollars ($1.15 billion) up more than 50% year-over-year.

Its operating profit was 18.9 billion Hong Kong dollars, up 27.8% year-over-year.

Higher gold prices helped to boost its overall profit margin and lifted the gross profits of its weight-based gold products, Chow Tai Fook's chief financial officer Karen Yih told CNBC's "Squawk Box Asia" on Friday.

Chow Tai Fook is also benefitting from growing demand for its design-led products, as China's economy continues its K-shaped recovery, Yih added.

"Our high-margin fixed-price jewelry sells exceptionally well," she said, noting strong demand in higher-tier Chinese cities and in international markets. "Even though, when [the] gold price is volatile, these demands tend to be more resilient," she added.

Chow Tai Fook's guidance for the 2027 financial year also came in above expectations on both sales and margins, according to a Citi note on Thursday. Same-store sales growth in April and May were also stronger than expected, buoyed by demand recovery in its weight-based gold jewelry business amid a pullback in gold price.

Citi estimated that Chow Tai Fook could gain net profit margin growth in 2027 on plans to open more luxury and self-operated stores, as well as its signature jewelry collections.