Key Takeaways:
Chow Sang Sang forecast interim attributable profit of HK$2.1 billion to HK$2.2 billion, more than doubling from HK$910 million a year earlier.
"The gold price's stabilization will be a key driver of both fundamentals and valuation repair," Huaxi Securities said in a research note, as the brokerage pointed to pent-up jewelry demand building through the second quarter.
The profit alert, for the six months ended June 30, 2026, reflects two drivers. Retail sales in core markets improved significantly versus a year earlier, with strong sell-through at stores. Separately, the company booked unrealized gains on its precious-metal borrowings after gold prices moved, reversing an unrealized loss in the prior-year period. Chow Sang Sang operates jewelry retail across Hong Kong, mainland China and Macau.
Gold jewelry prices at major Chinese brands have climbed to about 1,330 yuan per gram. Chow Sang Sang quoted 1,333 yuan per gram, the highest among peers, while Chow Tai Fook, Chow Tai Seng and Chaohongji quoted 1,332 yuan, and Luk Fook and Gold Kam quoted 1,330 yuan.
Huaxi Securities noted that second-quarter domestic gold jewelry demand fell to 50 tons as consumers adopted a wait-and-see stance during sharp price swings, but expects the suppressed demand to be released in the second half. China Gold Association data showed first-half national gold consumption reached 511.412 tons, up 1.23 percent year on year, holding up despite volatile prices. The brokerage said it favors leading jewelry names for a valuation recovery in the second half.
Shares of Chow Sang Sang rose as much as 20 percent intraday to HK$14.25, the highest since Feb. 23, before trading up 15.66 percent at HK$13.96. The move came as some institutions expect international gold prices to push toward $5,000 an ounce, supporting jewelry sector valuations. Spot gold has climbed this year as investors sought a hedge against inflation and geopolitical risk, lifting the value of jewelry retailers' inventories.
The profit surge reflects stronger consumer spending in the luxury retail segment and could lift sentiment across Hong Kong-listed jewelry peers including Chow Tai Fook and Luk Fook. Investors will watch the full interim results, including any interim dividend, for detail on margins and same-store sales. The company has not yet disclosed a dividend or full revenue figures for the period.
This article is for informational purposes only and does not constitute investment advice.
