Uncertainty hits Chow Tai Fook growth

Business | Jeannie Tang 15 Jan 2019

China's largest jeweler Chow Tai Fook Jewellery (1929) posted a 6 percent decline in same-store sales growth in Hong Kong and Macau in the last quarter of 2018 amid the uncertain macro environment.

The same-store sales growth in the mainland dropped by 7 percent, while growth in the mainland, and Hong Kong and Macau were 6 percent and 23 percent respectively in the previous quarter.

Besides, the same-store sales volume growth both dipped by 11 percent in Hong Kong and Macau, and in the mainland.

In Hong Kong and Macau, same-store sales of gem-set jewelry declined by 8 percent, with an average selling price of HK$11,500, 2.5 percent down from the previous quarter.

In the mainland market, same-store sales of gem-set jewelry dropped by 5 percent, but its respective retail sales value increased by 3 percent, with a 4.3 percent quarter-by-quarter decline in average selling price to HK$6,600.

The same-store sales of gold products in both markets were affected by a decline in volume growth as gold price strengthened. Hong Kong and Macau reported a 6 percent decline and the mainland saw an 11 percent drop.

However, the average selling price of gold products improved in the quarter due to an increase in average weight per gold product sold, with 5.7 percent increase in Hong Kong and Macau to HK$7,400 and 10 percent jump in the mainland to HK$4,300. The average international gold price in the quarter dropped by 4 percent when compared to the same period last year.

Hong Kong and Macau saw a decrease of 1 percent in retail sales value growth and the growth in the mainland rose by 1 percent.

Retail sales value of e-commerce business in the mainland dropped by 7 percent year on year while volume recorded an increase of 12 percent.

The sales contribution from mainland tourists improved to 47 percent as compared to 42 percent for the same period last year.

The group opened 259 stores in the mainland in this quarter, of which 227 are Chow Tai Fook Jewellery stores.

There were five new Chow Tai Fook Jewellery stores opened in Hong Kong, Korea and Malaysia. The group had 3,085 stores at year end. The group's stock price dropped by 0.8 percent to HK$6.21 yesterday, while it declined by 26.5 percent in the past six months.

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