The Hour Glass has been suffering from the downtrend in the luxury goods market in both Hong Kong and China due to the clamp down of corruption from the Chinese government since 2015. This can be seen from the share price where it fell from its highest peak of S$0.88 to around S$0.71. And yes, I was vested prior to the plunge in share price. The Hour Glass currently makes up 3% of my entire stock portfolio. Re-capping my reasons to stay invested:

• Simple luxury watch business
• Good management
• Consistent dividend
• Consistent profitability and performance (Revenue, Profits and NAV)
• Low debt servicing ratio

 

Luxury Consumption vs State of Economy

The Hour Glass is in the luxury watch business and luxury consumption is led by the state of the economy. Under good times, people have more spending power and thus the ability to spend on luxury goods. The Hour ......