Core Viewpoint - The announcement of new gold value-added tax regulations by the Chinese government has led to a significant stock price correction for gold and jewelry retailers, although the overall impact on industry profitability is expected to be mild with a projected mid-single-digit decline in earnings per share [1] Company Analysis - The stock price correction is considered excessive, primarily driven by additional factors such as falling gold prices and profit-taking during the U.S. government shutdown [1] - The companies Chow Tai Fook and Luk Fook Jewelry are still viewed positively, with "buy" ratings assigned and target prices set at HKD 17.8 and HKD 23.8 respectively [1] - Anticipated mid-term performance results from both companies are expected to alleviate investor concerns [1]

Core Viewpoint - The gold and jewelry stocks have collectively rebounded following the announcement of new tax policies related to gold trading by the Ministry of Finance and the State Taxation Administration of China, which is expected to standardize the industry and impact non-compliant businesses while benefiting leading compliant brands [1][1]. Group 1: Stock Performance - As of the report, the stock prices of several gold and jewelry companies have increased: - Lao Pu Gold (06181) rose by 5.33% to HKD 642.5 - Chow Tai Fook (01929) increased by 3.98% to HKD 14.38 - Chow Sang Sang (00116) went up by 1.66% to HKD 12.85 - Luk Fook Holdings (00590) gained 1.09% to HKD 24.18 [1][1][1]. Group 2: Tax Policy Impact - The new tax policy has led to significant pricing differences among various gold jewelry brands, with prices for gold jewelry from brands like Chow Tai Fook, Chow Sang Sang, Lao Feng Xiang (600612), and Lao Miao ranging between CNY 1255-1259 per gram, while some brands have prices fluctuating between CNY 1100-1200 per gram [1][1]. - According to Huayuan Securities, the short-term increase in terminal prices may suppress consumer demand, but the long-term expectation is that the policy will regulate previous non-compliant tax practices, thereby promoting industry development [1][1][1]. Group 3: Market Dynamics - The new policy is anticipated to significantly impact non-compliant businesses, while leading compliant brands are expected to strengthen their competitive advantages, potentially driving market share towards these top brands in the medium to long term [1][1].

格隆汇11月10日丨周大福(01929.HK)宣布，公司将于2025年11月25日(星期二)举行董事会会议，藉以考 虑和批准公司及其附属公司截至2025年9月30日止六个月的中期业绩、宣派中期股息(如有)，以及处理 其他事项。 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何 部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 承董事會命 周大福珠寶集團有限公司 聯席公司秘書 鄭炳熙 香港，2025 年 11 月 10 日 於本公告日期，執行董事為鄭家純博士、鄭志恒先生、鄭志雯女士、黃紹基先生、 鄭 錦 標 先 生 、 鄭 炳 熙 先 生 及 孫 志 強 先 生 ； 及 獨 立 非 執 行 董 事 為 鄺 志 強 先 生 、 林健鋒先生、柯清輝博士、鄭嘉麗女士、車品覺先生、馮詠儀女士、鄧迎章先生 及黃靜瑛女士。 董事會會議日期 周大福珠寶集團有限公司（「本公司」）董事會（「董事會」）謹此宣佈，本公司 將於 2025 年 11 月 25 日（星期二）舉行董事會會議，藉以考慮和批准本公司及其 附屬公司截至 2025 年 9 月 30 日止六個月的中期業績、宣派中期股息（如有）， 以及處理其他事項。 ...

Investment Rating - The report maintains a recommendation for the industry, indicating a stable outlook for textile manufacturing and a positive trend for gold and jewelry sectors [3]. Core Insights - Textile manufacturing is expected to gradually improve due to stable overseas demand and low inventory levels, despite short-term production efficiency issues and order delays from existing clients [7][11]. - Brand apparel is facing pressure due to weak domestic consumption, with only a few companies showing positive performance through strong product and channel strategies [7][38]. - The gold and jewelry sector is experiencing high growth driven by low base effects, rising gold prices, and product structure upgrades, with leading brands showing significant revenue growth [7][49]. Summary by Sections Textile Manufacturing - Overseas demand remains stable, with low inventory levels in the U.S. indicating a healthy supply chain [12]. - Major global brands like NIKE are seeing recovery after two years of channel optimization, with orders expected to improve as major sporting events approach in 2026 [11][18]. - Key companies to watch include Shenzhou International, Yuyuan Group, and others with Southeast Asian production capabilities [34]. Brand Apparel - The performance of brand apparel companies is generally under pressure, with most reporting low single-digit revenue growth and declining profits [38]. - Notable exceptions include Mercury Home Textiles and Luolai, which reported significant revenue and profit increases due to product expansion and multi-channel strategies [38]. - Companies like Mercury Home Textiles and Li Ning are recommended for their positive brand momentum and strategic changes [48]. Gold and Jewelry - The gold and jewelry sector saw a 11.5% increase in retail sales in the first three quarters of 2025, driven by rising gold prices and product upgrades [49]. - Leading brands such as Chao Hong Ji and Man Ka Long reported substantial revenue growth, with Chao Hong Ji's revenue increasing by nearly 50% in Q3 2025 [54]. - Investment recommendations focus on brands with strong market positioning and ongoing product and channel upgrades, such as Chow Tai Fook and Chao Hong Ji [67].

Core Viewpoint - The gold retail market is experiencing a dichotomy, with rising gold prices leading to increased demand for investment gold bars while traditional gold jewelry sales are declining due to high prices and changing consumer behavior [4][12][16]. Gold Price Movement - On November 8, COMEX gold futures rose by 0.42% to $4007.8 per ounce, with a weekly increase of 0.28%. Spot gold also saw a daily increase of over 1%, reaching $3997.63 per ounce [1]. - COMEX silver futures increased by 0.57% to $48.225 per ounce, with a weekly rise of 0.13% [3]. Retail Market Dynamics - Despite rising gold prices, jewelry stores are facing challenges, with many brands, including Chow Tai Fook, closing stores due to poor performance. As of September 30, Chow Tai Fook had 6041 retail points, down from 6644 in March, with a significant reduction in mainland China [6][8]. - In the third quarter, Chow Tai Fook's same-store sales in mainland China and Hong Kong fell by 8.6% and 10.0%, respectively [9]. Financial Performance - Chow Tai Fook reported a decline in retail points and same-store sales, while its competitor, Luk Fook, also saw a reduction in store numbers but experienced a revenue increase due to higher average selling prices driven by rising gold prices [10][11]. - For the first nine months of 2025, Chow Tai Fook's revenue decreased by 37.35%, but its overall gross margin improved to 29.74% due to product mix optimization [9]. Impact of Tax Policy - The new gold tax policy implemented on November 1 is expected to further pressure the retail market, with costs for non-investment gold enterprises increasing due to reduced input tax deductions [15][16]. - Following the tax policy, gold prices surged, with Chow Tai Fook's price per gram rising from 1198 to 1265 yuan within a few days [15]. E-commerce Growth - E-commerce has emerged as a growth area for several gold jewelry companies, with Chow Tai Fook and others reporting significant increases in online sales. For instance, Chow Tai Fook's e-commerce revenue grew by 28.72% compared to the previous year [17][19]. - The shift to e-commerce is driven by consumer preference for lower-priced, lightweight gold products, which are more competitive online due to lower processing fees [19].

Group 1 - The new tax policy on gold, effective from November 1, 2025, has caused significant changes in the gold market, affecting both banking operations and gold jewelry prices [1] - Banks have adjusted their gold accumulation services, with some halting the withdrawal of physical gold bars, while account-based services remain largely unaffected [3] - Despite the temporary suspension of certain services, demand for physical gold bars remains high, leading to rapid sales on banking apps [3] Group 2 - Individuals selling used gold jewelry are generally exempt from value-added tax, but frequent and large-scale sales may be classified as business activities, incurring a 3% tax [4] - Retail prices for gold jewelry are expected to rise due to the new regulations, with brands like Chow Tai Fook and Lao Feng Xiang already increasing prices [4] - The new tax policy will reduce input tax deductions for non-investment gold jewelry companies, potentially increasing their costs [5] Group 3 - Consumers are advised to purchase gold bars from Shanghai Gold Exchange member units to avoid the impacts of the new policy, as these transactions are less affected and offer more transparent pricing [7] - For gold jewelry purchases, consumers should compare price increases across brands to avoid overpaying due to policy-induced price hikes [7] - Individuals should be cautious when selling large amounts of used gold jewelry to assess potential tax risks [7]

Core Insights - The surge in gold prices has led to increased investment demand, particularly in gold ETFs, while retail gold jewelry demand has significantly declined, indicating a shift in consumer behavior from jewelry to investment [2][12] - Major jewelry retailers, such as Chow Tai Fook and Chow Sang Sang, are experiencing a wave of store closures, particularly in lower-tier cities, as high gold prices deter consumers and impact sales [5][7] Retail Performance - Chow Tai Fook reported a net closure of 905 stores in 2025, reducing its total to 6,501, marking an end to years of expansion [5] - Chow Sang Sang also faced a decline, with 74 stores closed in the first half of 2025, including 62 from its main brand [5] - The closures are concentrated in franchise stores in lower-tier cities, while self-operated stores have seen slight growth [7] Consumer Behavior - High gold prices have led franchisees to adopt conservative inventory strategies, resulting in a reluctance to stock large amounts of gold due to financial risks associated with price fluctuations [9] - The rise of live e-commerce has diverted customers from physical stores, exacerbating the challenges faced by brick-and-mortar retailers [9] - Retail sales of gold jewelry have been negatively impacted, with consumers becoming more cautious and delaying purchases due to high prices [11][12] Market Dynamics - The World Gold Council noted a significant drop in gold jewelry demand in China, attributed to unprecedented price increases outpacing income growth, which has weakened consumer purchasing power [12] - Investors are drawn to gold for its potential appreciation, while consumers view it as a product, leading to decreased demand as prices rise [12]

Core Insights - Despite the surge in gold prices, retail business for gold stores, particularly in lower-tier cities, is struggling, leading to significant store closures [1] Company Summary - Chow Tai Fook's retail points in mainland China increased from 4,452 in 2021 to 7,407 in 2024, but the company closed 905 stores in 2025, reducing the total to 6,501 [1] - The average daily store closure rate is 2.5, marking the end of a multi-year expansion phase for the company [1] Industry Summary - The trend of rising gold prices has not translated into increased sales for gold retailers, particularly affecting franchise stores in smaller cities [1] - The ongoing price increase has led to a more challenging business environment rather than a sales boom [1]

Core Viewpoint - The new tax policy on gold, effective from November 1, 2025, aims to regulate the gold market by mandating that investment gold transactions occur through official exchanges, while consumer gold must be purchased through compliant retail channels [1][3]. Industry Impact - The announcement will disrupt the traditional processing structure of the gold industry, affecting all players from upstream processors to downstream retailers and consumers [3][6]. - The policy allows buyers who purchase standard gold through exchanges to be exempt from value-added tax (VAT), while those who do not must pay a 13% VAT, significantly impacting profit margins for non-compliant businesses [4][6]. Transformation of the Supply Chain - The tax reform is expected to accelerate the industry's shift towards standardization and centralization, particularly impacting upstream processing operations that previously relied on informal channels to minimize tax liabilities [6][8]. - The requirement for all investment gold to be traded through national exchanges will enhance transparency and traceability, reducing tax evasion and illegal circulation [6][8]. Retail Market Dynamics - Retail costs are anticipated to rise, leading to a potential closure of around 30% of small franchise stores in lower-tier cities, while luxury brands may remain less affected due to their focus on cultural and aesthetic value rather than material costs [7][9]. - The traditional low-price model of certain merchants is under threat, as compliance costs and VAT will eliminate their competitive pricing advantage [7][8]. Consumer Price Effects - Following the announcement, gold jewelry prices have increased significantly, with major brands raising prices by over 5% within days, leading to consumer concerns about affordability [11][13]. - The price of gold bars has also risen, making bank purchases of investment gold a more attractive option for consumers [13][14]. Future Market Outlook - The market is expected to evolve into a clearer distinction between investment and consumer gold, promoting a healthier and more regulated environment [14]. - The shift may lead to a consolidation of smaller players who cannot adapt to the new regulations, while larger firms that can comply will thrive [8][14].