LFX(SH:600612) Sou Hu Cai Jing·2025-10-12 15:14Core Viewpoint - The company, Lao Feng Xiang, is strategically investing in the high-end luxury market by acquiring a 20% stake in Maybach Luxury Goods Asia Pacific Ltd. for $24 million, aiming to leverage international brand resources to develop the high-end luxury market in the Asia-Pacific region [2][3]. Investment Details - Lao Feng Xiang plans to invest through its subsidiary, Lao Feng Xiang Hong Kong Ltd. (LFXHK), acquiring 2,000 voting shares in Maybach Luxury Goods, which will enhance its business development in the luxury sector [2][3]. - The investment is not related to Maybach's automotive business, focusing instead on luxury lifestyle products such as optical goods, fashion apparel, perfumes, home goods, silverware, and pet products [3]. Previous Initiatives - This is not the first move by Lao Feng Xiang in the luxury sector; in September, it established Lao Feng Xiang Luxury Sales Co., Ltd. with an investment of 50 million yuan to focus on high-end products like jewelry and watches [4]. Financial Performance - The company is facing financial pressure, with a 20.5% year-on-year decline in revenue to 56.793 billion yuan and a nearly 12% drop in net profit to 1.95 billion yuan for 2024 [5]. - The wholesale business, which accounts for over 70% of revenue, has a low gross margin of 9.39%, while retail operations have a higher margin of 23.61% [5]. Market Challenges - The traditional franchise model is seen as inadequate for the high-end transformation, with concerns about brand control and market positioning [6]. - The transition from jewelry to comprehensive luxury goods requires significant adjustments in supply chain, talent, and management, posing a challenge for the company [6].