Prudent management of its chain of stores has helped Hang Fung Gold Technology, the jewellery manufacturer and retailer, cope with fluctuations in mainland tourist spending, soaring rents and interest rate rises. The company's interim profit for the six months to the end of September increased 16.3 per cent to $48.4 million, Hang Fung announced yesterday. Basic earnings per share were 6.69 cents, down from 7.42 cents due to a dilution after the company boosted its capital base with a one-for-three rights issue in April. The issue raised about $186 million to repay bank loans and reduce the company's gearing ratio which stood at 67 per cent at the end of September. Chairman Lam Sai-wing said the business from mainlanders taking advantage of the individual travellers scheme had dropped more than 20 per cent. However, further relaxations on travel restrictions in four cities - Jinan, Qingdao, Shenyang and Dalian - had helped offset some of those losses. 'We have not rushed to open shops in the expensive areas this year. Instead, building our presence in 'second-tier' areas has helped us make great cost savings. As a result, we have not suffered severely from high rents like some of our competitors,' Mr Lam said. He said the company had avoided areas where landlords were asking $500 per square foot and instead had taken on rents of about $100 per square foot. Mr Lam said the company's expansion plans included opening 1,000 retail outlets in 100 mainland cities by 2010. Mr Lam and Alvin Ching Man-kit, president of the Chinese Gold & Silver Exchange Society, were bullish about the gold market, forecasting the price to reach US$600 an ounce early next year. Their optimism was based on strong demand from India and China continuing for another four to five years.