Chow Sang Sang Predicts 80% Profit Surge
August 20, 25
(IDEX Online) - China's third biggest jewelry retailer is forecasting a huge 80 per cent increase in half-yearly profits, driven by high gold prices and the net closure of 74 of its 1,032 stores last year.
Chow Sang Sang told shareholders yesterday (19 August) that it expects profits for the six months to 30 June to hit HKD 900m to HKD 920m (USD 114.3m to USD 116.84m), marking a dramatic reversal of fortune.
Profits for H1 2024 were HKD 502m (USD 64.3m) down 39 per cent, year-on-year, and in H2 2024 they dipped to HKD 270m (USD 34.4m), down 24 per cent.
If the forecast is correct, Chow Sang Sang's half-yearly profits will soar by 79 to 83 per cent.
"Sales of gold items garnered higher gross profit margins as the price of gold stayed on an uptrend," the company said.
"Reduction in costs realised from the rationalisation of the store network and other cost-control measures also contributed to the profit increase."
It is due to publish its Q2 interim results next Wednesday (27 August).
In March Chow Sang Sang said revenue FY 2024 was down by 15 per cent to HKD 21.18bn ($2.72bn). Same-store sales were down 38 per cent in Mainland China and 24 per cent in Hong Kong and Macau, primarily due to a drop in diamond demand.
At the time, after a net reduction of 74 stores, it did not rule out further closures.