Luk Fook Holdings stocks rose nearly 9 per cent yesterday after the company reported its net profit for the six months to September 30 had more than doubled, but analysts warned of a possible slowdown in the second half of the financial year.
The Hong Kong-based jeweller rose 8.8 per cent in intraday trading before closing 6.54 per cent higher at HK$30.15.
It recorded a 125 per cent increase in net profit to HK$719 million for the six months, while revenue climbed nearly 70 per cent to HK$5.5 billion.
The company said a surge in mainland arrivals in Hong Kong and their stronger buying power, boosted by the appreciation of the yuan, were the major contributors to its solid earnings. Increasing demand for gold also helped considerably.
But despite the robust growth, Eugene Mak, an analyst at Core Pacific-Yamaichi Securities, said the luxury retail industry might see slower growth in the second half as the Chinese market began to feel the pinch of the sluggish global economy.
He said Luk Fook's same-store sales in Hong Kong and Macau dropped dramatically in the first three weeks of this month, when sales grew just 20 per cent year on year. The company saw a year-on-year growth of about 50 per cent between April and September.