报告名称：Luk Fook(00590.HK)Santa Claus did not come
报告类型：港股研究
报告日期：2016-01-11
研究机构：麦格理证券
股票名称：六福集团
股票代码：00590
页数：8
简介：Consumer sentiment remains weak in China and Hong Kong. As the mini gold rush effect faded away in September, the boost in sales was temporary. Echoed by Hong Kong retail sales figures, the jewellery sector continued to record a double-digit decline (See ¨Hong Kong retail sales No sign of recovery〃). We expect the companyˇs sales performances in Hong Kong for 3QFY16 to stay weak. Given its high exposure to Hong Kong, we remain cautious about the operating data to be announced next week. On the other hand, the economic slowdown in China and the stock market volatility might negatively impact consumer sentiment in China.
Operating deleverage might prevail. The expense to revenue ratio increase from 13% to 14.6% in 1HFY16, mainly due to a 12% YoY growth in rental expense and weak top lines, hinders the profit margins. We believe operating deleverage will prevail as long as there is no improvement in jewellery sales in the 2HFY16. Although the company has attained 10 consecutive quarters of positive SSSg in gem set jewellery in China, we believe a ¨cold〃 Christmas might put the run to an end.
Store consolidation to lower rental burden and improve efficiency. We believe there will be no big changes in the total number of stores in HK/ Macau when store consolidation is completed this year, as the company has the least number of self-owned stores among the top three gold and jewellery retailers in Hong Kong. While the negotiation for rental reduction with landlords proceeds, time is needed for the reduction to materialise and thus we think the rental expense will still experience a mild increase.

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