LFX(SH:600612) Tai Mei Ti A P P·2025-10-23 09:30Core Viewpoint - The recent high-premium cross-border investment by the traditional Chinese jewelry brand Lao Feng Xiang (600612.SH) has drawn significant market attention amid high gold prices and pressure on its core business. The company announced a $24 million investment in a newly established luxury goods company with a net asset value of only $1,300, raising questions about the rationale behind such a high valuation and the uncertainty of investment returns [1][2]. Group 1 - Lao Feng Xiang plans to invest $24 million to acquire 20% of Maybach Luxury Goods Asia Pacific (MAP), which was established on February 11, 2025, and has not yet commenced operations. The valuation of MAP is $126 million, with a staggering appreciation rate of 9,692,207.69%, indicating a significantly inflated transaction value [2][3]. - The Shanghai Stock Exchange has issued a regulatory inquiry, requesting Lao Feng Xiang to justify the necessity and reasonableness of acquiring a minority stake at such a high premium without any historical operating performance from MAP [2][4]. - Lao Feng Xiang will not participate in the daily operations of MAP, only appointing one director and one financial director, which raises concerns about the company's involvement in the management and operational decisions of the new investment [3][4]. Group 2 - The luxury goods sector is a new area for Lao Feng Xiang, which may face challenges such as brand recognition, market promotion, pricing strategies, and consumer acceptance as it attempts to expand into this market [4]. - The international gold price has surged from around $3,300 per ounce to over $4,000, with a nearly 60% increase this year, negatively impacting the demand for gold jewelry and pressuring the performance of traditional gold retailers [5][6]. - Despite efforts to enhance its brand and expand into high-end markets, Lao Feng Xiang's financial performance has suffered, with a 20.5% decline in revenue to 56.793 billion yuan and a nearly 12% drop in net profit to 1.95 billion yuan in 2024 [7][9].