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High gold prices may take the shine off Hipine as it seeks Hong Kong IPO

The maker of gold watches is grappling with high production costs and weak sales growth following a big jump in prices of the precious metal

This article only represents the author's own views.

Time may be its core business, but gold watch maker Shenzhen Hipine Precision Technology Co. Ltd. seems to have lost its sense of timing by filing for a Hong Kong IPO last week.

Gold prices have been soaring lately as central banks and investors globally stock up on the metal as a hedge against economic uncertainty. That’s creating headaches for companies that make gold accessories, including watches, like Hipine. They can try to charge higher prices to offset their rising material costs, but that can scare away consumers. That dilemma becomes doubly poignant in a weak economy like China’s right now, where consumers are reining in their spending, especially for expensive, discretionary items like gold accessories.

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