Shares in Chow Tai Fook Jewellery Group, the world’s largest listed jewellery retailer by market capitalisation, surged more than 8% in Hong Kong trading on Thursday after the company released a trading update that beat market expectations. The stock closed at HK$12.34, its highest level in three months, as investors cheered a strong rebound in same-store sales across Hong Kong and Macau during the festive period.
The Hong Kong-based firm reported that same-store sales in Hong Kong and Macau rose by 15% year-on-year in the final quarter of 2024, driven by a surge in mainland Chinese tourist arrivals and higher spending per visitor. The recovery marks a sharp turnaround from the previous quarter, when sales had fallen by 5% amid weaker consumer sentiment. Analysts at Citi noted that the data suggests “a meaningful recovery in luxury spending” in the region, though they cautioned that the rally may be partly a catch-up effect after a prolonged downturn.
For UK investors, the move highlights the sensitivity of global luxury stocks to Chinese consumer demand. Chow Tai Fook is not directly listed on the London Stock Exchange, but its performance is closely watched as a bellwether for the wider luxury goods sector, which includes UK-listed names such as Burberry Group and Compagnie Financière Richemont. A sustained recovery in Chinese spending could provide a tailwind for these stocks, particularly if tourist flows continue to rise.
Gold prices, which have remained elevated near $2,050 per ounce, also supported demand for jewellery as a store of value. However, some analysts warned that high gold prices could eventually weigh on volume growth if consumers delay purchases. “The rally in Chow Tai Fook is encouraging for the sector, but we remain cautious on the sustainability of demand given the macroeconomic headwinds in China,” said a note from Morgan Stanley.
For UK pension holders, the indirect exposure through funds holding luxury or emerging-market equities means that any sustained recovery in Chinese consumer confidence could boost portfolio returns. However, the volatility of such stocks also underscores the importance of diversification. The FTSE 100 rose 0.3% on Thursday, with luxury and consumer stocks among the gainers, as global risk appetite improved.