Earnings at Hong Kong jewellery retailers dipped in the first half of their fiscal year 2023, weighed down by economic headwinds coupled with geopolitical and Covid-related uncertainties.

Chow Tai Fook Jewellery Group said profit attributable to shareholders in the first six months ending September 30, 2022 was down 6.8 per cent to HK$3.33 billion (around US$6 billion) from year-ago figures, mainly due to a net foreign exchange loss arising from a weaker renminbi. 

Revenues meanwhile rose 5.3 per cent to HK$46.53 billion (approximately US$426 million), supported by retail expansions in China and strong sales of gold jewellery and products amid business and pandemic challenges.

As of end September, Chow Tai Fook has 6,948 points of sale, with 933 new boutiques in the mainland. The jeweller said its retail network in China is poised to reach 7,000 POS by the end of FY2023.

“Against the backdrop of a challenging business environment characterised by macroeconomic externalities, the group remains cautiously optimistic about opportunities,” noted Chow Tai Fook, but said it remains “positive on the mid- to long-term growth prospects of China’s economy and jewellery market.”

Moving forward, the company expects gradual turnaround in economy and consumption sentiment to drive mid-term growth as it focuses on tapping opportunities in the bridal jewellery category in lower-tier mainland cities and enhancing product offerings to entice millennials.

Meanwhile, pent-up demand for bridal jewellery and a gradual easing of social distancing measures are expected to fuel growth in Chow Tai Fook’s Hong Kong business in the second half of FY2023. 

Tse Sui Luen Jewellery (International) Ltd, for its part, reported a 30 per cent year-on-year decline in net income to HK$1.9 million (around US$244,000) for the six months ending September 30, 2022 due to ongoing global challenges. Revenues were also down 10.7 per cent to HK$1.24 billion (around US$158.6 million).

China’s economy, for instance, suffered tremendously from continued economic slowdown alongside rising Covid/omicron cases during the period. Business in Hong Kong and Macau meanwhile improved on the back of government-led consumption voucher schemes. A double-digit growth in e-commerce also helped offset the negative impact on sales performance, according to Annie Tse, chairman and CEO of TSL.