Chow Tai Fook Jewellery Group Ltd., which operates over 2,300 shops in more than 500 cities, indicated strong sequential growth over Q2 2016 after experiencing substantial declines during the past two years amid a slowdown in China's economy and fewer tourist arrivals in Hong Kong. The statement for the Third Quarter (the three months ended 31 December 2016) includes no specific sales figures, rather indicating year-over-year percentages, for which it reported mixed results: Mainland China recorded 7% growth in overall retail sales value (RSV) year-over-year, with same store sales (SSS) increasing 4%, while Hong Kong and Macau saw total RSV fall 6% while SSS fell 2%. The company claims the RSV performance for Mainland China and Hong Kong and Macau markets improved sequentially, "due to stabilising fundamentals and a relatively low base of comparison."
Same store sales volume for both regions were down 9% compared to Q3 2015, which means that the average selling price (ASP) grew during the quarter. "In particular, ASP of gold products increased as the average international gold price rose 10% during the Third Quarter compared to the same period last year." Sales of gold products increased 7% in Mainland China and 8% in Hong Kong and Macau, while gem-set jewelry fell 4% in Mainland China and plunged 17% in Hong Kong/Macau. Gem-set jewelry is good for 26% in Mainland China and 24% of retail sales in Hong Kong/Macau, while gold products represent 60% and 58% respectively. E-commerce picked up substantially in Mainland China, as RSV of the e-commerce business grew by 25% and contributed 4% and 12% of RSValue and retail sales volume, respectively in Mainland China in the Third Quarter.
Rapaport News points out that Chow Tai Fook’s shares jumped more than 5 percent after the jeweler reported relatively strong quarterly sales amid renewed growth in China and higher gold demand.