Jeweller Chow Tai Fook says profit rises 32 pct in line with forecast
HONG KONG, June 17
HONG KONG, June 17 (Reuters) - Chow Tai Fook Jewellery Group Ltd, the world's largest jewellery retailer by market value, said on Tuesday its profit for the year ended March jumped 32 percent, thanks to strong demand for gold products early last year.
Chow Tai Fook, a well-known brand among consumers in mainland China, posted a profit of HK$7.3 billion ($942 million), in line with a forecast for profit of HK$7.14 billion, according to Thomson Reuters' SmartEstimate. That compared with HK$5.51 billion profit in the previous year.
"We have every confidence in the economic development of mainland China, being one of the world's strongest economies and the second-largest luxury market," chairman Henry Cheng said in a filing to the Hong Kong bourse.
"We are positive about Hong Kong for having the fundamentals and strengths to remain a vibrant global business platform and a favourite tourist and shopping destination," he added.
Chow Tai Fook, which competes against smaller rival Luk Fook Holdings International Ltd, had in November posted a 92.3 percent jump in April-September profit, fuelled by a "gold rush" as precious metal prices fell and buyers ignored slower economic growth and a crackdown on luxury spending in China.
Analysts said weakening retail sales in Hong Kong and slower growth of mainland travellers visiting the city had prompted concern over the outlook for both retailers and retail property owners. Chow Tai Fook is seen, however, to be in a relatively better position due to its large exposure to mainland China.
Hong Kong saw its sales value of jewellery, watches and valuable gifts dive 39.9 percent in April due to a plunge in sales of gold jewellery as compared to the start of the "gold rush" in April last year.
In China, jewellery sales remained weak, falling 12.1 percent in May. That was compared to a 30 percent drop in April, and a 6.1 percent decline in March.
Shares of Chow Tai Fook ended up 1.3 percent before the earnings were announced.
($1 = 7.7515 Hong Kong dollars) (Editing by Matt Driskill)