In contrast to Tomei’s more subdued tone, Poh Kong is taking a more positive stance. He says the company plans to put more emphasis on finer craftsmanship for its products in order to attract buyers. Moving forward, Ng believes the market remains challenging for Tomei and it will have to continue to innovate and assess market needs. Furthermore, because Tomei does not have a hedging policy, the fluctuation in gold prices impacts its margins. In addition, it holds the exclusive rights to retail De Beers jewellery.Ĭontrary to popular belief, when gold prices increase too rapidly, it does not help with sales as people will adopt a wait-and-see attitude, Ng remarks. We have also opened two new outlets this year,” Ng says.īesides the Tomei brand, the jeweller also has several other brands in its portfolio, including My Diamond, Goldheart and Le Lumiere.
We have been consolidating our brands in malls and closing down those whose product range does not fit the particular market of the mall. “We found that the environment of the shop is very important for customers and we are moving to bigger format stores, it is more efficient. So far this year, it has closed four to five outlets, with 65 remaining. The company has been consolidating its outlets in the country, closing down non-performing ones or those that do not fit the market of a particular mall. Although uncertainties drive customers to these products, those who had wanted to invest in them would probably have already bought what they wanted.” But gold investment products are not something that consumers can easily digest. Tomei has seen a surge in demand for gold investment products this year, he says, without disclosing the percentage of increase compared with the previous year. This year is an auspicious one for marriage, according to the lunar calendar, so that has helped with gold sales as well,” Ng explains. “During Christmas, diamonds are popular while pearls and jades are in demand during the Mother’s Day celebration. He adds that jewellers see demand for different kinds of products during different festive periods. Sales usually increase during the Hari Raya celebrations. Ng says the jewellery business is tied to the festive seasons and its performance largely depends on customers’ “spending mood”. In its second quarter ended June 30, net profit jumped to RM5.64 million from RM485,000 a year earlier. There is still a lot of money in the market, but we have to be able to offer at the right price and at the right time,” he says. “To be honest, in terms of customer visits, the sentiment is still weak. Tomei group managing director Datuk Ng Yih Pyng tells The Edge that the better performance seen this year is largely due to the increase in gold prices, which resulted in higher retail sales prices. The precious metal has gained 11.33% this year and some analysts expect it to continue to rally as tensions between North Korea and the US escalate. The jewellers’ better financial numbers and rallying share prices reflect the strengthening of gold prices amid geopolitical tensions and uncertainties.Īs at last Thursday, gold was trading at US$1,282.35 per troy ounce. The company has also impressed, with net profit for the financial year ended July 31 growing 2.6 times from a year ago. Meanwhile, Poh Kong’s share price jumped 48.45% to 72 sen from 48.5 sen between Aug 15 and 27. The surge came after the jeweller announced its earnings for the second quarter ended June 30, in which net profit improved 11.5 times from the previous corresponding period.
Tomei saw its share price rise 49.5% to 87.5 sen on Sept 27 from 58.5 sen on Aug 16. However, as consumers usually tighten their purse strings when economic and geopolitical uncertainties linger, will the jewellers continue to shine? LISTED jewellers Poh Kong Holdings Bhd and Tomei Consolidated Bhd have seen a surge in their share prices over the last two months on the back of improving earnings.
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