Tse Sui Luen (TSL) expects to report a loss for the first half of its financial year as a drop in consumer confidence in China outweighed a tourism-driven recovery in Hong Kong.
The Hong Kong-based jeweller expects to lose at least HKD50 million ($6.4 million) in the six months to 30 September, it said on Tuesday. This compares with a profit of HKD 2 million ($255,509) for the same period last year.
Consumer sentiment on the mainland has weakened amid a troubled property market and a “gloomy” economic outlook, the company said. Although gold jewellery has driven a gradual improvement in overall sales in the region, demand for diamonds continues to falter.
While the Chinese government’s pro-growth measures are gradually boosting the recovery momentum, it still takes time to stimulate luxury consumption, especially for natural diamond products,” TSL said.
The challenging market in China outweighed a rise in profits in Hong Kong thanks to the reopening of the border and a rebound in tourism. Chinese tourists to Hong Kong tend to drive the city’s luxury sector.
Meanwhile, Hong Kong jeweller Chow Tai Fook reported a 6% rise in total sales for the second quarter ended 30 September, while Luk Fook reported a 47% rise for the same period. Both saw an increase in sales from China. However, Hong Kong drove total revenue.
TSL will release its first-half results by the end of November.
