Hongkong Has Dragged Down Its Share Price.

Compagnie Financi re Richemont SA (CFR.VX) opened 1.9% lower on Thursday, down to 0.73% in the no press times 88.05 Swiss francs, the largest decline in the stock market in early trading of 2.4%.

In the first three months ended December 31, 2014, Richemont's peak income was unchanged from the same period of last year, and the market expected growth of 1.5%. According to the actual exchange rate, sales in the three quarter increased by 3.7% to 3 billion 51 million euros.

Hongkong's sales in the Asia Pacific region dropped by 12% compared with the previous year after the exchange rate was cut off.

In the first half of the year, the performance of 5.8% was significantly lower than that in the first half of the year. The decline in real terms was 5% from 2% in the first half and 1 billion 70 million euros in total sales.

The group blamed the recession on the high base in the same period last year, as well as the extensive regional business environment represented by Hongkong and Macao, especially some business partners of the wholesale channel of watch department.

Richemont

The Burberry Group PLC (BRBY.L) Boboli group, a British luxury group, also warned Hongkong sales in the three quarter earnings that the sales will be retrogressive and the gross profit will be depressed.

Patrik Schwendimann, an analyst at Zuercher Kantonalbank AG, an investment bank in Switzerland, said Richemont's performance in Asia Pacific region was "obviously disappointing". Bank Vontobel analyst Rene Weber said the situation in the region was worse than expected, but markets in Europe, the Middle East and the United States all hope.

Benefiting from strong sales in the regional market, the return of major tourist cities and favorable exchange rate fluctuations, the sales increase has been increased to 9% from 3% in the first half of the year after excluding exchange rate effects. The increase in real terms has increased from 4% in the first half to 10%, and the total sales volume has reached 1 billion 192 million euros.

The US sales grew by 7% to 547 million euros after the exchange rate was cut off, which was significantly slower than the 13% growth in the first half.

Although Japan's domestic demand is still weak due to tax increases, it has resumed growth after excluding the impact of the exchange rate, and sales rose 2% to 242 million euros compared with the same period. The decline in real exchange rate has narrowed from 13% in the first half to 2%.

Luxury electric business Net-a-Porter is the only highlight of the three quarter of Richemont, which has achieved 7% growth in the other quarter, and sales increased by 11% to 670 million euros from 603 million euros in the same period last year.

The jewelry department's sales dropped 1% after the exchange rate was cut off, and the real exchange rate rose 3% to 1 billion 565 million euros. The professional watch Department lost 4% of its sales after the exchange rate was cut off, and its real exchange rate decreased by 816 million euros compared with the same period last year.

In the three quarter, group net cash amounted to 4 billion 900 million euros, an increase of 14% over the same period last year, a record for the three quarter.

Sanford C. Bernstein, a well-known industry analyst Mario Ortelli, expects Group Chairman Johann Rupert to take advantage of its large cash reserves after a year's holiday return.

With the reversal of the foreign exchange trend, retailers' inventory is dropping and orders are increasing, and Cartier Cartire may launch new products. Mario Ortelli also expects that Richemont will become better in the second half of the year.