Loan scandal sees ports tumble 43pc | South China Morning Post
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  • Mar 4, 2015
  • Updated: 1:48am

Loan scandal sees ports tumble 43pc

PUBLISHED : Wednesday, 23 May, 2012, 12:00am
UPDATED : Wednesday, 23 May, 2012, 12:00am
 

It was an ugly scene as high-end fashion group Ports Design plunged a record 43 per cent yesterday after its chairman quit for failing to disclose connected transactions.

Ports Design, which resumed trading after being suspended for nearly two months, recovered a little from the intraday low to close 38 per cent down at HK$7.04. Its sister company PCD Stores fell nearly 10 per cent to HK$0.74.

The benchmark of Hang Seng Index edged up 0.6 per cent.

The company said in a filing on Monday night that chairman Edward Tan had received interest-free advances from a company unit between January 2010 and this month that should have been announced as 'disclosable transactions and connected transactions'.

'This has dealt a blow to investors' confidence in the company's corporate governance,' said Wendy Huang, head of research at SinoPac Securities (Asia).

'Actually, the company is also facing tough times amid weak market demand and mounting inventory pressure.'

Ports reported a 9 per cent drop in net profit to 430 million yuan (HK$530 million) last year despite a 16 per cent growth in revenue.

Apart from Ports, several other leading retailers have lately seen their stocks hit by increasing economic uncertainties and shrinking demand.

In the jewellery sector, a drop in global gold prices - 18 per cent in eight months - has led to weaker sales growth for retailers. Chow Tai Fook, China's largest jewellery and watch retailer, has seen its stock slump 28 per cent this year, while Luk Fook Jewellery is down 35 per cent.

The sportswear sector continues to be in the doldrums as leading companies struggle to clear their inventories following years of rapid expansion. Anta shares have lost a third of their value since January, while Li Ning has been flat.

Consumer electronics is in no better place. Gome Electrical Appliances Holdings shares have shed 34 per cent this year, partly because the government subsidy scheme to promote home appliance purchases expired in some key cities in January.

By contrast, luxury goods retailers have recorded above-average gains, mostly generated in Asia. Italian luxury brand Prada has risen 34 per cent this year and high-end luggage maker Samsonite, 18 per cent. This compares with a mere 1 per cent growth of the Hang Seng Index.

According to the National Statistics Bureau, the mainland's retail sales grew 14.8 per cent in the first quarter, compared with 18.5 per cent last year.

Wei Xiaopo, consumer analyst with CLSA, said he expected the retail industry to recover in the second half, although the whole year's growth would still be lower than last year.

'We think industry leaders with self-owned brands and well-controlled distribution networks will have an edge when the entire market is cooling down,' he said.

SinoPac Securities' Huang said Beijing was studying a new round of stimulus measures to boost consumption, including tax restructuring and reduction.

1961

The year Ports was originally founded as Newport Canada by Canadian entrepreneur Luke Tanabe in Toronto

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