Profit Warning: Zhou Dafu'S Profit Is Expected To Drop By Half.

Recently, Hongkong jewelry retailer --

The jewelry group issued a profit warning that profits in the 2015 fiscal year may be half of the same period last year, due to the further weakening of consumer demand.

The announcement pointed out that the loss of profits was mainly due to the weakness of consumption in the Greater China region.

And gross margins declined.

The decline in gross margin was mainly attributable to the unrealized hedging deficit of gold loans recorded in the year ended March 31, 2016, compared with the unrealized hedging gains in the same period last year, and the increase in sales of low margin gold products to change sales mix.

The company said that in addition to the effect of gold loan unrealized hedging gains or losses and the net foreign exchange losses due to RMB fluctuations, the profit in 2015/16 is expected to decrease by about 20-30% compared with last year.

The profit warning was lower than previously expected. According to Reuters, in January this year, Zhou Dafu group said it would close some stores in Hongkong. In the first half of fiscal year 2015, Zhou Dafu's profits fell by 42% compared with the same period last year.

The depression of the overall economic environment has caused a great impact on Zhou Dafu group.

Zhou Dafu said that low profit gold products sales accounted for an increase, resulting in lower gross margins, and hedging pactions have unexpected losses, these factors will impact on the annual profits.

In the 2014 fiscal year ended June 5, 2015, Zhou Dafu's net profit was 5 billion 460 million Hong Kong dollars.

Zhou Dafu's weakness is only a microcosm of Hongkong's overall retail industry.

As of March, Hongkong's retail sales have declined for thirteenth consecutive months, while sales of jewellery, watches and clocks and valuable gifts have declined for 19 consecutive months.

Zhou Dafu, who is struggling to keep up with Hongkong, or continuing to close stores to ease operational pressure, Zhou Dafu chairman Zheng Jiachun told the media that in the first half of 2015, three stores had been closed in the region, and 7 to 8 branch tenancies expired in the second half of the year, hoping to get more than 30% of the rent reduction.

At present, Zhou Dafu has three branches in Xingang center, of which the underground G12 shop will be tenant in the second half of the year.

The monthly rent of Zhou Dafu's six branches (including hilltop Plaza, Tongluowan Lockhart Road, part of Tsim Sha Tsui and Mong Kok branch), which has been closed down and will soon be closed, is estimated to be up to tens of millions of yuan per month, that is, more than 100 million yuan per year.

It is worth mentioning that the Hong Kong stock and gold and jewelry listed companies fall into the mire of declining performance. Zhou Dafu is not the only one.

According to statistics from Hongkong, Hongkong's retail sales plunged 21% to HK $37 billion in February, the biggest decline since 1999, and the 12 consecutive month of decline.

From 1 to February, retail sales fell 14% year-on-year, with sales of jewellery, clocks and watches dropped by 24%.

Retail sales of jewelry accounted for over 80% of Zhou Shengsheng's total turnover last year.

Net profit fell by 20% compared with the previous year, while Lufu group's same store sales fell 27% in the first quarter of this year, compared with a 20% decline in the same period last year.

Insiders said, "in the short term, the scale of mainland tourists visiting Hong Kong is not expected to recover; the stagnation of the Hongkong property market and the relatively weak stock market have also led to a decline in consumption in Hongkong.

Looking forward to the whole year of 2016, the negative factors in the whole year are expected to be eliminated in the short term, and the retail industry in Hongkong will continue to decline.

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Hongkong's latest unemployment rate remains 3.4%.

The latest statistics published by the Statistics Department of the Hongkong Special Economic Zone, 17, showed that the unemployment rate of seasonal adjustment from February to 4 was 3.4%, the same as that from January to March, and the rate of underemployment remained unchanged and maintained at the level of 1.4%.

In terms of industry analysis, the increase in unemployment rate is mainly seen in the construction industry and professional and commercial services industries. The decrease is mainly seen in the arts, entertainment and Kangle industries, and the information and communications industry.

Compared with the statistics from January to March this year, the total employment in Hongkong decreased from about 5200 to 3 million 806 thousand and 600 in February to April. The total workforce decreased by 1400 to 3 million 940 thousand and 800, and the number of unemployed increased by 3800 to 134 thousand and 200.

Zhang Jianzong, director of the labour and Welfare Bureau of the Hongkong Special Administrative Region government, said that according to the industry analysis, the unemployment rate in the construction industry increased by 0.5 percentage points to 5.4% in the period from February to April this year.

Recent recedes in property consolidation and construction may have an impact on this.

He also said that due to the downward trend of the tourism industry and the weakening of local consumption in Hongkong, the unemployment rate related to the sectors related to consumption and tourism (retail, accommodation and catering services) increased by 0.2 percentage points to 5.3%, and the number of employed persons has declined for Twelfth consecutive years.

Zhang Jianzong said that the severe external environment and slow growth of Hongkong's local economy will continue to perplex short-term employment prospects.

In particular, labour demand for trade, tourism and construction related industries is weakening.

Xian Riming, Professor of marketing department of Chinese University Hong Kong, said that the recent performance of Hongkong's retail industry has been declining rapidly, and there may be a succession of layoffs or layoffs in the industry.

At the same time, Hongkong's exports will continue to shrink, which will also affect the unemployment rate of logistics, insurance and other related industries.

Retail and export are important economic pillars of Hongkong. Their weak performance will affect other industries, and the overall unemployment rate is expected to rise slightly in the next quarter.