KUALA LUMPUR (May 12): Gold prices still have room for increases, despite the retail price of the yellow metal having risen three times in 2023, according to gold and jewellery brand Tomei Consolidated Bhd. 

Tomei managing director Datuk Ng Yih Pyng, however, said the company does not forecast gold prices due to current market uncertainties, but is confident that the value of gold will stay positive in the market. 

“If you look at the retail price [of gold], it has increased three times since January, and I feel that there is still room to increase,” Ng told the press after Tomei’s 18th annual general meeting (AGM) at the Bukit Kiara Equestrian & Country Resort on Friday (May 12). 

“We do not forecast [gold] price increases. If the price goes up, we pass it down to the consumer. Similarly, if the price goes down, we will also reduce the selling price,” Ng said.

He added that gold, as an inflation-proof asset, will continue to be in demand, and he is optimistic that the company, which has 60 retail outlets in Malaysia, will continue to be profitable in the financial year ending Dec 31, 2023 (FY2023).  

“As Malaysia's economy continues to grow, of course there is a bit of inflation pressure and disposable income might be affected, but we should be able to continue to be profitable,” Ng said. 

He said that there is investment demand among Malaysian consumers who have bought gold as a hedge against inflation. Besides that, Ng observed that the culture of gifting gold for wedding, anniversary and birthday celebrations had been maintained.

“Despite having less disposable income during inflation, if the customer's budget is RM1,000, he will still spend RM1,000 [albeit] on a smaller item,” Ng said. 

Nonetheless, Ng said that the recent Hari Raya Aidilfitri celebrations had interestingly seen a surge in customers trading in gold for cash. 

“A trade-in surge is normal during the Raya season, whereby customers bring in old jewellery for new jewellery, but now there is a surge in selling gold for cash,” Ng said. 

Tomei’s independent non-executive director Raja Tan Sri Datuk Seri Aman added that scenarios such as central banks accumulating gold and China cutting down US bonds to buy gold are signs that the yellow metal remains a safe haven. 

Tomei posted record-high annual net profit and revenue for FY2022. Net profit more than doubled to RM65.89 million from RM32.77 million a year earlier, while revenue rose 32.37% to RM974.31 million from RM736.07 million previously.

The group declared a first and final dividend of four sen per share, the highest since 2007. The dividend proposal was among the 14 resolutions that were fully passed in the AGM on Friday. 

Moving forward, Ng said the challenge for Tomei would be to control its operating cost due to rising interest rates. 

Apart from that, Ng said the group continues to be “careful” with expansion plans. Last year, Tomei aimed to build its presence in East Coast areas. This time, Ng said Tomei is “open to where the opportunities are at”, and did not disclose any expansion target. 

Despite also not disclosing its sales target, Tomei is set to put higher focus on increasing sales of gem-set jewellery, such as diamond, emerald, ruby, sapphire and pearl, in conjunction with the brand's 55th anniversary in 2023. 

Tomei is aiming for higher margins from gem-set jewellery for their design and workmanship. 

At Friday's noon break, Tomei shares settled unchanged at RM1.33, valuing the group at RM184.34 million. The counter climbed 38.54% in the past six months. 

At the time of writing, gold was trading at US$2,011.4 per ounce. 

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