Hong Kong's TSL Fears Trade-War Impact

RAPAPORT... Hong Kong-based Tse Sui Luen (TSL) raised concerns about theimpact of the US-China tariff war on its business, even after sales improved inthe second fiscal half. "The recent outbreak and escalation of [a] trade disputebetween China and the US has cast some doubts on the economic outlook for boththe global and local economies going forward," the company said Tuesday. "Oneconsequence has been the devaluation of [the Chinese yuan] duringthe period, which could bring certain influence to our business in Hong Kongand mainland China during the remainder of this financial year." Revenue rose 10% to HKD 1.91 billion ($243.9 million) in thesix months ending September 30, the retailer reported. Sales in Hong Kong andMacau climbed 13% to HKD 712.2 million ($90.9 million) amid an increase intourist traffic and stronger local demand, while revenue in mainland China grew9% to HKD 1.17 billion ($149.1 million). However, the jewelry retailer recorded a loss of HKD 103.1million ($13.2 million) compared with a profit of HKD 87.7 million ($11.2million) the previous year due to the impact of currency fluctuation. China'syuan currency has dropped 6% against the US and Hong Kong dollars since January 1. Meanwhile, the recent completion of the HongKong-Zhuhai-Macau Bridge connecting Hong Kong to the mainland, as well as a newexpress rail track serving Hong Kong, will help offset the impact of thepotential challenges in the next 12 months, TSL noted. The year-on-year figures are not an exact comparison becausethe second fiscal half this year ran from April to September, whereas last yearit ran from March to August. Image: A TSL store in Hong Kong. (Prosperity Horizons)