Hendry Releases Earnings Warning And Expects Medium Term Net Profit To Go Backwards

In view of the signs that the clocks and watches are not yet showing signs of recovery, the Hendry group, the world's largest international watch retail group, issued a profit warning earlier, and the net profit in the first half of this year will drop compared with the same period in 2012.

　 Short or medium term performance or sustained downturn

For Hendry group to buy Ming Feng Group shares, CIC consultant senior researcher Xue Shengwen told the "daily economic news" reporter, it is intended to jointly expand the domestic luxury jewelry retail business. On the one hand, Ming Feng group can provide Hendry with luxury jewelry products; on the other hand, it sells the jewelry products of Ming Feng Group through its stores, which is a strategy of strong alliance.

In Xue Shengwen's view, from 2009 to 2012, the revenue of Hendry group increased rapidly from 5 billion 900 million yuan to 12 billion 100 million yuan, but in 2012, the growth rate was only 6.5%. In contrast, in 2012, the Oriental watch camp closed at HK $4 billion, while the British watch and jewellery revenue was HK $6 billion 500 million in 2012. From the point of view of revenue, the Hendry group is nearly 6 times the eastern watch bank, more than 2 times the number of the clocks and watches jewellery.

However, Xue Shengwen said that the impact of the anti-corruption policy, the domestic high-end watch market growth declined sharply, while the Hendry group mainly engaged in high-end high-end watch and wholesale business, this impact is more obvious. At the same time, the domestic high-end watch market did not appear positive news, Hendry group performance in the medium and short term will remain low.

　 Customs agreement or influence Hendry

In addition, in April this year, Hendry group increased its stake to Fengyi (a company engaged in watch and jewellery sales in Hongkong) to 70%, expanding the mid end watch market in Hongkong. Its sales and profits last year were HK $1 billion 800 million and HK $98 million respectively. This year, we will have about 8 months' financial performance contribution.

Hendry group's business is mainly in the Greater China region dominated by the mainland. As the middle class of the mainland continues to expand and consumption power continues to rise, the reduction of tax rates and the retention of consumers in the mainland will undoubtedly bring positive effects on the company's business.

For the trade agreement, which the industry called "Swiss watches tariffs fall by 60% in 10 years", will help the further improvement of the Swiss watch market share in the medium and long term. Xue Shengwen believes that Hendry group has largely benefited from the advantages of zero tariff in the Hongkong region. The tariff level of the Swiss watches in the mainland has dropped significantly, which will inevitably weaken the market competitive advantage of Hendry group.