Chow Tai Fook Jewellery, the largest jewellery retailer in Hong Kong and on the mainland, posted a 79 per cent jump in net profit for the last fiscal year and said it expected to double its revenue in three years.
Net profit rose to HK$6.34 billion for the year to March, in line with market expectations, while revenue grew 61 per cent to HK$56.6 billion.
'This is no surprise to the capital markets as last year was a particularly strong year for almost all jewellery retailers,' said Eugene Mak, an analyst with Core Pacific-Yamaichi Securities. 'But investors have been bearish about the sector because of a much weaker demand for high-end jewellery since this year.'
Chow Tai Fook, which raised about HK$15.8 billion in an initial public offering of shares on the Hong Kong stock exchange in December, expects to achieve 'sustainable growth' this year despite the uncertain economic environment.
The share price dipped 1.9 per cent yesterday to close at HK$9.22 each ahead of the earnings report. The stock has plunged 38.5 per cent since its debut on December 15, compared with a 5.3 per cent fall in the benchmark Hang Seng Index over the same period.
The operator of 1,627 jewellery and watch shops and counters, mostly on the mainland and in Hong Kong and Macau, reported a 40 per cent rise in same-store sales last fiscal year. 'These growth drivers were fuelled by our successful business strategies, continued strong expansion of mainland China's overall economy and increasing demand for jewellery, especially for event-driven and festival celebrations,' it said.