Hong Kong-based jewellery retailer Luk Fook Holdings (International) Ltd is counting on solid demand for fine jewellery in China to sustain growth.

The company reported an 8.8 percent hike in revenues to approximately HK$15.9 billion (about US$ 2.04 billion) for the year ending March 31, 2019. Operating profit was up 14.3 percent while profit attributable to equity holders rose 9 percent.

Net profit went up 9.7 percent despite diminishing market sentiment in the second half of the year largely due to the US-China trade war.

Wong Wai Sheung, chairman and group CEO, commented, “The group expects flattish growth in revenue and profit in FY2019/20 but hopes to maintain its profitability. In view of an anticipated considerable middle-class growth in China, the group is optimistic about mid- to long-term business prospects.”

Sales of gold and platinum products were up 0.9 percent, accounting for 51.8 percent of overall sales, while demand for gem-set jewellery products was 17 percent higher during the period in review. 

Hong Kong continues to play a key role in the group’s portfolio. Visitors from China fueled the retail business in Hong Kong, with revenues rising 11.6 percent. Income from China increased at a faster pace compared to other markets, registering an 18.6 percent improvement, Lukfook said.

As of March 31, the group has a global network of 1,828 shops, including 197 new stores. 

Further commenting on the Chinese market, Wong said, “The implementation of policies to promote domestic consumption and push forward urbanisation in China led to continuing increase in the middle-class population. With strong growth potential in China, the group will continue to actively pursue further development in the market.”