* Q1 revenues jump 63 pct on strong gold product sales
* Shares climb as much as 15 pct, set for best day on record
* But Q1 gross profit margin dropped 3 pct (Adds investor selling shares, updates share price in paras 1,4,5)
HONG KONG, July 10 (Reuters) - Shares in Hong Kong's Chow Tai Fook Jewellery Group Ltd jumped as much as 16 percent on Wednesday after the world's largest jewellery retailer by market value reported strong revenue growth due to plummeting gold prices.
In a statement to the Hong Kong Stock exchange late on Tuesday, the group reported a 63 percent rise in revenue in the first quarter of the financial year from the same period in 2012. Sales of gold products from its own stores soared 78 percent in the quarter ended June 30. [here ]
Gold posted a record quarterly fall from April-June, luring mainland Chinese buyers to Chow Tai Fook's almost 1,800 jewellery and gold stores across China, Hong Kong and Macau.
The stock ended 13 percent higher at HK$9.16 on Wednesday after rising as much as 16 percent, its biggest-ever daily percentage gain.
Taking advantage of the higher prices, one institutional investor sold 9.39 million shares for between HK$8.4 and HK$8.7 per share, amounting to as much as HK$817 million ($105 million) total, according to a term sheet obtained by Reuters.
Analysts said cross-selling of non-gold jewellery and replenishment of orders from franchisees also drove up Chow Tai Fook's sales numbers.
CLSA lifted its forecast of Chow Tai Fook's growth in same-store sales for the full year to 12 percent from 5 percent and predicted full-year group revenues would reach HK$69 billion ($8.9 billion), implying 20 percent growth.
But some analysts said the luxury retailer's growing reliance on lower-margin gold sales would not necessarily translate into sustainable profits in future.
"We are negative on jewellery stocks in the medium term on weakening gold demand, overexpansion and declining return on invested capital of new shops," analyst Edwin Fan at Jefferies wrote.
Chow Tai Fook said its gross profit margin had dropped by around 3 percent in the first quarter.
"(The fall was) mainly due to a change in product mix as the portion of gold products increased to 69 percent of revenue," it said.
Chow Tai Fook offers a mix of products from gold bars and diamond rings for China's burgeoning mass market to elaborate custom-made pieces for wealthier clients, with the Hong Kong-listed jeweller seen to be a rival to Cartier and Tiffany & Co. ($1 = 7.7565 Hong Kong dollars) (Reporting By Yimou Lee, James Pomfret and Alison Lui; Editing by Lee Chyen Yee and Jane Baird)