Chow Tai Fook Jewellery Group Ltd. reported slightly weaker-than-expected profits amid broader economic headwinds, as concerns grew about its longer-term outlook following China’s removal of a long-standing tax rebate on gold.

First-half net income for China’s largest jewellery retailer remained flat at HK$2.5 billion ($321 million), according to a Tuesday filing, falling short of the HK$2.6 billion analyst estimate. Gross margin fell slightly to 30.5%, although the group said that an improved mix of higher-margin fixed-price jewellery and gold price appreciation provided support.

Average selling prices on fixed-price gold jewellery in mainland China saw growth during the period, amid premiumisation efforts to compete with peers such as Laopu Gold Co.

Chow Tai Fook has faced mounting c

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