Hong Kong tycoon Cheng Yu-tung’s Chow Tai Fook Enterprises Ltd. is making a foray into China’s oil trading business, Reuters reported, citing traders recruited by the firm.
The conglomerate controls the world’s biggest jewelry firm, Chow Tai Fook Jewellery Group Ltd. (01929.HK), and New World Development Co. Ltd. (00017.HK).
China’s state-controlled oil sector is subject to heavy restrictions, but independent companies are expecting Beijing to lift at least some of the barriers this year.
Family-controlled Chow Tai Fook Enterprises has already prepared the ground to take advantage of the opportunities, the report said.
It set up Chow Tai Fook Energy Co. Ltd. in July, the traders said, and Gao Jianfeng, a former trading manager for Chinese oil and gas giant Sinopec Corp., said he had been appointed its president.
The traders said the decision to launch a trading operation may have been prompted by a slowdown in the group’s core activities.
Its jewelry business, which relies heavily on the mainland for its revenues, posted a 10 percent drop in sales in its most recent quarter and is expecting the current quarter to be weak as well.
A slowing mainland real estate market has also hurt New World Development.
– Contact us at [email protected]