A gold rush involving rising numbers of mainland visitors and Hong Kong newlyweds saw jewellery retailer Luk Fook Holdings (International) almost double its earnings last year.
The company recorded a net profit of HK$531.63 million for the year to March, up 93.2 per cent on the previous 12 months, with sales climbing 36 per cent to HK$5.39 billion.
The news sent Luk Fook shares jumping as much as 9 per cent yesterday before closing 7.34 per cent higher at HK$11.12. The Hang Seng Index advanced 1.1 per cent.
Undeterred by surging gold prices, mainlanders were responsible for half the retail sales at Luk Fook's Hong Kong stores. Overall, the deep-pocketed tourists helped boost retail sales in Hong Kong and Macau by a third to HK$3.8 billion last year as their numbers grew 6.5 per cent year on year to about 17 million.
To cash in on the relaxation of the mainland's individual travel scheme, the jewellery retailer opened a two-storey shop in Tsim Sha Tsui last year, giving it five in the tourist hot spot and a total of 31 throughout Hong Kong. In Macau, where it has four shops, sales jumped 88 per cent to HK$504 million due to the low base effect.
An 8 per cent increase in the number of weddings in Hong Kong last year also helped generate strong demand for gold products such as bracelets, necklaces and rings, which are common gifts for newlyweds, despite a more than 33 per cent rise in the price of the precious metal globally in the past year.
Luk Fook financial controller Paul Law Tim-fuk shrugged off concerns about the impact on sales of a potential slowdown in global economic growth, citing a 40 per cent increase in same-store sales in Hong Kong and Macau in the second quarter this year while mainland stores registered a 20 per cent gain.