Sou Hu Cai Jing·2026-01-17 09:05Core Viewpoint - The gold market is experiencing a significant bull run, with international gold prices rising over 70% in the past year, marking the largest increase since 1979, and domestic gold jewelry prices also surging [1][2]. Group 1: Upstream Mining Companies - In 2025, gold mining companies are witnessing substantial revenue and net profit growth, with Zijin Mining leading with revenue of 254.2 billion and net profit of 37.864 billion [2]. - Other notable companies include Shandong Gold with revenue of 83.783 billion and net profit of 3.956 billion, and Zhongjin Gold with revenue of 53.976 billion and net profit of 3.679 billion [2]. - The profit growth of mining companies is significantly outpacing revenue growth, indicating a "scissors gap" effect where cost increases are lower than gold price increases [2]. Group 2: Central Bank Purchases - Multiple factors are driving the continued rise in gold prices, including geopolitical risks, global de-dollarization narratives, and central bank purchases [3]. - As of December 2025, China's gold reserves reached 2306.32 tons, with the People's Bank of China increasing its holdings for 14 consecutive months [3]. Group 3: Downstream Jewelry Brands - In contrast to the booming upstream sector, downstream gold jewelry brands are facing challenges, with significant revenue declines reported in 2025 [6]. - For instance, Chow Tai Fook's revenue dropped to 89.66 billion HKD, a decrease of 17.53% year-on-year, while Chow Sang Sang's revenue fell by 15.34% [6]. - The decline in performance is attributed to high gold prices and macroeconomic uncertainties affecting retail consumption [6]. Group 4: Store Closures and Market Dynamics - A wave of store closures is impacting jewelry brands, with Chow Tai Fook closing 606 stores and Chow Sang Sang reducing its franchise stores by 380 [7]. - Despite the overall downturn, some brands like Lao Pu Gold and Chao Hong Ji are experiencing growth, with Lao Pu Gold's revenue increasing by 250.95% [8]. - The success of these brands reflects a structural shift in the industry towards differentiated products and branding strategies [8][9]. Group 5: Future Outlook - The gold bull market is expected to continue, but volatility is anticipated, particularly for jewelry companies that must innovate to meet consumer demands [11]. - Analysts suggest that while gold prices may not rise as sharply in 2026, the long-term outlook remains positive due to ongoing central bank purchases and the need to hedge against declining dollar credit [10][11].