Jewellery shop in Hong Kong
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Hong Kong’s major jewellery retailers reported weaker profits in the six months ending September 30, 2019 largely due to high gold prices, and the impact of the US-China trade dispute and the social unrest in Hong Kong.
Chow Tai Fook Jewellery Group Ltd said profit attributable to shareholders during the first half of fiscal year 2020 was down 20.8 percent to HK$1.53 billion from HK$1.93 billion during the same period in 2018.
Luk Fook Holdings (International) Ltd meanwhile saw a 25.4 percent drop in profit to HK$496.3 million during the period in review from HK$665.42 million a year ago.
Both companies said the jewellery retail market, particularly in Hong Kong and Macau, is likely to face more headwinds in the second half of the fiscal year owing to macroeconomic uncertainties. Business in China however remains promising, they added.
“The Hong Kong and Macau market will remain challenging in the near term. Yet, our strategy on market penetration to lower-tier and county-level cities in China will continue to keep our growth momentum,” Chow Tai Fook said in its financial report.
Wong Wai Sheung, chairman and CEO of Lukfook, meanwhile commented, “The downside risk of the group’s business will continue into the second half of the financial year. The group thus expects a double-digit drop in terms of annual revenue and profit in this financial year.”
Lukfook also said it will continue to expand its reach overseas and in China, citing the Chinese market’s growth potential in the mid- to long-term. “The group will continue to focus on business expansion in China and strive to promote a multi-brand strategy,” noted Lukfook.