Poh Kong sees better margins on high gold prices
Jeweller Poh Kong Holdings Bhd is expecting better profit margins for the year, on the back of rising gold prices and improved consumer demand.
Executive chairman and group managing director Datuk Choon Yee Seiong said gold prices looked to be on an uptrend, as prices had stabilised compared to the previous year.
“Analysts are expecting gold to hit US$1,350 (RM5,335.88) to US$1,400 (RM5,533.50) per ounce in the near term. There was a 13.5% increase in gold price at the close of 2017.
“The strengthening of the US dollar will also translate to better margins for the group,” he said after Poh Kong AGM.
“We expect a better year ahead, driven by our initiatives to enhance revenue and profitability, as well as an increase in consumer spending,” he added.
The jewellery segment continues to be Poh Kong’s leading revenue contributor.
Meanwhile, its online sales segment continues to expand, with the company in talks with several e-commerce platform providers to establish new online sales channels.
Marketing manager Elizabeth Choon said the company’s online sales had been picking up, with more customers purchasing online than before.
Poh Kong saw double-digit growth in online sales last year as compared to when it started selling its products online in 2012.
“We are seeing more purchases online for gold bars and expensive jewellery.
“Going forward, we will focus on growing our online store presence as well as increasing our product assortments online.
“We hope to announce a new e-commerce partner by the second quarter,” she said.
To date, Poh Kong markets its products online across five e-commerce platforms – Lazada, SuperBuy, Wedding.com, 11Street and BearInBag.
For the financial year ending July 31, 2018, Poh Kong plans to open three new outlets, with an estimated total capital expenditure including inventories of about RM3mil to RM5mil per store.
This will bring the company’s total store count to 94 nationwide.
Two of these three stores were opened in September and November last year, with one more outlet location to be identified.
Elizabeth noted that the company’s booming business in Johor was due to the large number of Singaporean customers served by the 12 stores in the state.
Poh Kong registered a net profit of RM5.36mil for the first quarter ended Oct 31, 2017, representing a two-fold increase as compared to the previous corresponding quarter.