Guoxin Securities Co., Ltd·2025-11-07 13:19Investment Rating - The industry rating is "Positive," indicating an expectation that the industry index will outperform the market index by more than 5% over the next six months [10]. Core Insights - The new tax policy on gold, effective from November 1, 2025, introduces a differentiated VAT system based on the purpose of gold usage, which is expected to reshape the industry landscape [2][3]. - The policy aims to enhance regulatory oversight and prevent tax evasion through a "firewall" mechanism that restricts the transfer of tax credits [3]. - The impact of the new tax policy is expected to increase costs for gold jewelry retailers and shift market dynamics towards larger trading platforms [4][7]. Summary by Sections Tax Policy Changes - The new tax classification divides gold transactions into "investment purposes" and "non-investment purposes," with different VAT treatments [2]. - For on-exchange transactions, VAT exemption applies only to non-physical delivery trades, while physical delivery is taxed based on usage [3]. - Non-investment gold incurs a 13% VAT, significantly affecting cost structures for businesses [3]. Impact on Industry Segments - Gold jewelry retailers face increased costs due to reduced VAT deductions, leading to potential price hikes for consumers [4]. - The market response has been negative, with gold jewelry stocks dropping over 4% in the first week following the announcement [4]. - Industrial gold users are expected to increase their use of hedging tools due to rising costs [7]. Investment Recommendations - The report suggests focusing on leading members of the exchange, such as Zijin Mining and Shandong Gold, which are expected to benefit from cost advantages and high compliance barriers [8]. - Investment in gold ETFs is recommended as they are exempt from VAT, providing a way to avoid tax disruptions [8]. - Long-term prospects favor larger mining companies benefiting from market share increases due to the exit of smaller players [8].