Investment Rating - The industry investment rating is "Overweight" [8] Core Viewpoints - The report indicates that social retail sales maintained steady growth, with a year-on-year increase of 3.7% in July, supported by national subsidies [3][4] - Essential categories like grain, oil, and food showed stronger resilience, while discretionary categories such as gold and jewelry, and cosmetics saw improved performance [4] - Online retail channels continued to grow, with a 9.2% year-on-year increase in online retail sales from January to July 2025, while offline retail growth showed signs of marginal slowdown [5] Summary by Sections Social Retail Sales - The total retail sales of consumer goods from January to July 2025 reached 28,423.8 billion yuan, with July sales at 3,878 billion yuan, reflecting a year-on-year growth of 4.8% and 3.7% respectively [3] - Urban and rural retail sales increased by 4.8% and 4.7% year-on-year [3] Price Factors - The overall Consumer Price Index (CPI) remained stable, with food CPI down by 1.6% year-on-year [4] - Retail sales in various categories showed different growth rates, with essential goods like grain and oil up by 8.6% year-on-year, while discretionary items like cosmetics and jewelry saw increases of 4.5% and 8.2% respectively [4] Online vs Offline Channels - Online retail sales reached 86,835 billion yuan from January to July 2025, with physical goods online sales at 70,790 billion yuan, accounting for 24.9% of total retail sales [5] - Offline retail growth rates for supermarkets, convenience stores, and department stores showed a slight decline compared to the previous month [5] Investment Recommendations - The report suggests focusing on high-quality companies in sectors aligned with "emotional consumption," particularly in gold jewelry, offline retail, cosmetics, and medical aesthetics [6] - Specific recommendations include brands like Lao Pu Gold and Chao Hong Ji in gold jewelry, and companies like Mao Ge Ping and Pechoin in cosmetics [6]

Investment Rating - The report does not explicitly state an investment rating for the industry or specific companies within it [5]. Core Insights - The gold and jewelry industry in China is experiencing overall pressure, with a contraction in domestic gold product consumption in 1H25, leading to weakened manufacturing output [11]. - High-end market competition is intensifying, with brands like Chow Tai Fook and Luk Fook increasing their presence, directly competing for high-net-worth customers [8]. - Lao Pu Gold is shifting its product design to appeal to younger consumers aged 20-35, focusing on lightweight and dynamic jewelry designs that align with current consumer preferences [7][2]. Summary by Sections Market Trends - The gold jewelry industry is under pressure, with leading brands seeking differentiation through supply chain optimization, high-margin product introduction, and targeting younger demographics [11]. - The popularity of mid- to low-priced products is increasing, while high-priced, heavy-weight products are seeing a decline in demand [2][8]. Consumer Behavior - The target demographic for Lao Pu Gold is expanding to younger consumers with strong purchasing power, with recent bestsellers reflecting a preference for playful and structurally dynamic designs [7][2]. - High-net-worth customers exhibit limited repurchase rates, indicating a need for brands to innovate and attract new customers [8]. Competitive Landscape - The competition in the high-end market is becoming more pronounced, with brands enhancing their offerings to attract high-net-worth individuals [8]. - Lao Pu Gold does not provide recycling services, which affects its performance in the second-hand market compared to previous years [8]. International Expansion - Brands are cautiously expanding into Southeast Asian markets, driven by cultural affinity among Chinese communities [9]. - The focus on profitability and brand alignment is critical as companies navigate international markets [9]. Research and Development - There is a significant variance in R&D speed across the industry, with some brands like CHJ leading in product innovation and frequency of new launches [10]. - Lao Pu Gold maintains strict review standards and longer product lifecycles, impacting its ability to quickly adapt to market changes [10].

Core Viewpoint - The Chinese gold jewelry industry is attracting investor attention due to its unique positioning within the global luxury market, with leading brands like Chow Tai Fook and Lao Pu Gold emerging as industry focal points despite moderate overall growth rates [2][3]. Market Size - By 2024, the retail scale of China's gold jewelry market is expected to reach $114 billion, accounting for 31% of the global market, which is equivalent to the combined markets of the US and Europe [3]. - The growth drivers include rising gold prices (11% CAGR), product innovation, and store expansion, with per capita annual consumption in China at $81, higher than the global average of $45 but significantly lower than Hong Kong ($663) and Taiwan ($236) [3]. Competitive Landscape - The industry is experiencing accelerated concentration, with the top 10 brands capturing 38% of the market share, an increase of 14 percentage points since 2019. Chow Tai Fook holds a 10% market share, while Lao Pu Gold, with a 1.2% share, is rapidly growing as a "national trend dark horse" [5]. Product Innovation - The industry is characterized by three major trends: - The rise of national trends, with Lao Pu Gold leveraging "culture + craftsmanship" to create high-margin products [7]. - IP collaborations attracting younger consumers, with Chow Tai Fook's partnerships leading to significant online sales growth [7]. - Emotional value driving consumption, as products symbolizing protection and prosperity become popular [7]. Channel Transformation - Online sales are becoming a key growth engine, with Chow Tai Fook's online sales expected to reach 20% by 2024, and Lao Pu Gold achieving a 287% year-on-year increase in online sales [8]. - Both companies are exploring overseas markets, particularly in Southeast Asia, with tailored products for local cultures [8]. Investment Perspective - Chow Tai Fook's profitability is driven by product popularity and same-store sales growth, while Lao Pu Gold is entering a new product/profit cycle with strong same-store sales growth and network expansion [9][10]. - Chow Tai Fook is expected to achieve positive same-store sales growth through store optimization and product upgrades, with a projected 30% profit growth in 2026 [11]. - Lao Pu Gold is anticipated to have a compound profit growth rate of 110% from 2024 to 2026, with a favorable risk-reward ratio following recent stock price adjustments [12]. Future Outlook - The core opportunity in the Chinese gold jewelry industry lies in leveraging culture to expand market share, with leading brands capturing high-end markets through national trend designs and IP innovations [13].

Core Viewpoint - The Chinese gold and jewelry industry is attracting investor attention due to its unique position in the global luxury market, with leading brands like Chow Tai Fook and Lao Poo Gold reshaping the industry landscape through product innovation and cultural empowerment [1][13]. Market Size - By 2024, the retail scale of China's gold and jewelry market is expected to reach $114 billion, accounting for 31% of the global market, equivalent to the combined markets of the US and Europe [2]. - The growth drivers include rising gold prices (11% CAGR), product innovation, and store expansion, with per capita annual consumption in China at $81, higher than the global average of $45 but still lower than Hong Kong ($663) and Taiwan ($236) [2]. Competitive Landscape - The industry is experiencing accelerated concentration, with the top 10 brands capturing 38% of the market share, an increase of 14 percentage points since 2019 [4]. - Domestic brands are performing well, with an 8.7 percentage point increase in market share; Chow Tai Fook holds a 10% share, while Lao Poo Gold, despite a smaller 1.2% share, is rapidly growing [4]. Product Innovation - The industry is characterized by three major trends: - The rise of "Guochao" (national trend) with Lao Poo Gold leveraging cultural and craftsmanship elements, achieving gross margins of 40%-50% [6]. - IP collaborations attracting younger consumers, with Chow Tai Fook's online sales significantly increasing through partnerships with popular IPs [6]. - Emotional value driving consumption, with products symbolizing protection and prosperity becoming bestsellers [6]. Channel Transformation - Online sales are becoming a key growth engine, with Chow Tai Fook's online sales expected to reach 20% by 2024, and Lao Poo Gold's online sales increasing by 287% year-on-year [7]. - Both brands are exploring overseas markets, particularly in Southeast Asia, with tailored products for local cultures [7]. Investment Perspective - Chow Tai Fook's growth is driven by product innovation and same-store sales growth, with a focus on new product launches to regain momentum [8]. - Lao Poo Gold is entering a new product/profit cycle, with strong same-store sales growth and an expanding sales network [9]. Future Outlook - The core opportunity in the Chinese gold and jewelry industry lies in cultural empowerment, with leading brands capturing high-end markets through innovative designs and global expansion [12][13].

Company Overview - Company was established in 2004 and has rapidly developed through a light-asset model and attractive franchise policies, maintaining a top 6 position in the Chinese jewelry market for seven consecutive years [2][3] - Revenue increased from 2.78 billion to 5.72 billion CNY from 2021 to 2024, with a CAGR of 27.1%, while net profit grew by 18.4% during the same period [2][3] - The average age of the management team is approximately 42 years, making it one of the youngest among national gold jewelry companies [2] Industry Analysis - The Chinese jewelry market is projected to reach 728 billion CNY in 2024, with a CAGR of 3.6% from 2019 to 2024 and an expected CAGR of 5.2% from 2024 to 2029 [3] - Consumer preferences are shifting towards lightweight and fashionable jewelry due to economic pressures, while maintaining high aesthetic standards [3] - E-commerce in the jewelry market is growing, with a market size of 42.4 billion CNY in 2024, representing a year-on-year growth of 13.7% and a CAGR of 16.9% from 2019 to 2024 [3] Competitive Advantages - The company employs a light-asset model that allows for rapid product iteration to meet the demands of a younger customer base, with 80% of online and 75% of offline customers being female aged 18-30 [3][4] - As of the end of 2024, the company operates 4,129 stores nationwide, ranking 6th among gold jewelry brands, with a strong presence in southern China [4] - Online sales accounted for 40% of total revenue in 2024, with a year-on-year growth of 31%, indicating a robust e-commerce strategy [5] Future Development - The company plans to enhance brand strength through a multi-brand matrix and aims to open up to five cultural theme stores by May 2025 [6] - The company has begun expanding into Southeast Asia, opening its first overseas store in Bangkok in September 2024, with plans for further expansion in the region [6] Investment Recommendations - The company is expected to achieve revenues of 6.48 billion, 7.32 billion, and 8.22 billion CNY for 2025-2027, with year-on-year growth rates of 13.3%, 12.9%, and 12.3% respectively [7] - Projected net profits for 2025-2027 are estimated at 800 million, 880 million, and 960 million CNY, with growth rates of 13.4%, 10.3%, and 8.8% respectively [7] - The company is assigned a target price of 44 HKD per share based on a 22x PE ratio for 2025, maintaining a "buy" rating [7]

中信证券发布研报，对周六福（06168）进行投资价值分析。该团队认为，周六福凭借以整合研发、指 定供应商供货为主的轻资产模式、较同行更具吸引力的加盟政策，迅速发展，当前大众珠宝市场趋于轻 量化、时尚化，公司的轻资产模式较好保障了效率，同时公司兼顾创新，未来计划着力提升品牌势能， 深挖海内外黄金珠宝消费市场。给予公司2025年22xPE,对应目标价44港元，首次覆盖，给子"买入"评 级。 未来发展：多品牌矩阵深挖国内市场，国潮形象出海东南亚。1)以多品牌矩阵，提升品牌势能。2025年 5月2日，周六福珠宝于北京国贸商城全球首发"周六福·吉"文化主题形象店。根据公司投资者交流会， 北京首家文化主题店客单价约1.5万元，2025年计划新增不超过5家文化主题店。2)出海东南亚，开拓蓝 海市场。公司在2024年9月14日于泰国曼谷开设海外首家门店，截至2025年7月23日，公司在东南亚共有 6家门店。东南亚市场凭借其文化亲近性高、对黄金产品偏好以及经济快速增长，成为我国黄金珠宝品 牌出海的首站，多个头部黄金珠宝品牌均在积极布局和升级东南亚市场现有业务。 竞争优势之一：模式轻巧、客群年轻、产品轻量。根据公司投资者交流会， ...

Group 1 - The company expects total revenue for the six months ending June 30, 2025, to be between RMB 10,400 million and RMB 10,500 million, representing a year-on-year increase of 4.2% to 5.2% compared to RMB 9,979.7 million for the six months ending June 30, 2024 [1] - The overseas revenue for the same period is projected to be between RMB 140 million and RMB 150 million, a significant increase of 273.3% to 300.0% compared to RMB 37.5 million for the six months ending June 30, 2024 [1] - The company anticipates a loss attributable to shareholders for the six months ending June 30, 2025, ranging from RMB 65 million to RMB 72 million, a substantial decrease of 237.1% to 251.9% compared to a profit of RMB 47.4 million for the same period in 2024 [1][2] Group 2 - The expected transition from profit to loss is primarily due to increased losses from Au(T+D) contracts and gold leasing, with total losses projected to be between RMB 680 million and RMB 700 million for the six months ending June 30, 2025, compared to a loss of RMB 345.7 million for the same period in 2024 [2] - The company engages in Au(T+D) contracts solely to hedge against gold price fluctuations and does not engage in speculative activities as defined by Hong Kong Financial Reporting Standard No. 9 [2] - The company plans to implement measures to mitigate the adverse effects of short-term gold price increases, aiming to sell products at prices above the average procurement cost, while closely monitoring market acceptance of rising gold prices [3]

Core Viewpoint - The traditional gold and jewelry industry is undergoing significant transformation challenges, exemplified by the struggles of established brands like Laomiao Gold, which has experienced a dramatic decline in revenue and profit amidst a changing market landscape [2][4][10]. Group 1: Company Performance - Laomiao Gold's parent company, Yuyuan Group, reported a nearly halved revenue in Q1 2025, with a 71% drop in net profit to 51.8 million yuan [4]. - The jewelry fashion segment of Laomiao Gold saw a staggering 60.2% decline in revenue, while its inventory turnover days increased to 442 days, significantly higher than the industry average of 200-250 days [4][10]. - In contrast, Laopu Gold achieved a 166.4% year-on-year sales growth in 2024, with a net profit increase of 254%, and its stock price surged by 202% in Q1 2025 [4]. Group 2: Strategic Challenges - Laomiao Gold is attempting a comprehensive reform strategy, focusing on channel development, IP creation, R&D, talent acquisition, and digitalization to enhance competitiveness [5][10]. - Despite efforts to engage younger consumers through live streaming and innovative store formats, the effectiveness of these strategies is questioned due to high costs and limited conversion rates [6][10]. - The company faces a fundamental strategic dilemma regarding its identity and market positioning, struggling to define whether to pursue high-end craftsmanship, become a multi-channel giant, or focus on regional markets [10][12]. Group 3: Industry Context - The gold and jewelry industry is experiencing a bifurcation, with innovative brands like Laopu Gold and Chaohongji achieving rapid growth, while traditional brands like Laomiao Gold face declining performance [10][11]. - The industry is undergoing a reshuffling, where success is determined by strategic clarity and execution rather than historical legacy [12].

Core Viewpoint - The new consumption sector in the Hong Kong stock market has shown strong performance in the first half of the year, with several companies reporting significant profit growth, leading to renewed optimism from investment institutions regarding the sector's future trajectory [1][6]. Group 1: Company Performance - Hong Kong-listed company Mao Geping expects a net profit of 665 million to 675 million yuan for the first half of the year, representing a year-on-year growth of 35% to 37% [1][4]. - Pop Mart announced a net profit growth of no less than 350% for the first half of the year, driven by increased global brand recognition and diverse product offerings [3][6]. - Lao Pu Gold anticipates a net profit increase of 279% to 288%, with expected revenues between 12 billion to 12.5 billion yuan, reflecting a year-on-year growth of 241% to 255% [3][4]. - Up Beauty expects a revenue of 4.09 billion to 4.11 billion yuan, with a profit growth of 30.9% to 35.8% [4][6]. - The food and beverage sector, represented by Guoquan, reported a revenue of 3.24 billion yuan, with a net profit growth of 122.5% [5][6]. Group 2: Market Trends and Analyst Insights - The new consumption sector has seen a surge in stock prices, with Lao Pu Gold up 220.12%, Pop Mart up 200.17%, and Up Beauty up 170.65% from January 1 to August 13 [2][6]. - Analysts express optimism about the new consumption sector, citing a shift in consumer preferences towards experiential and social consumption, which is driving demand for products in categories like trendy toys, tea drinks, and luxury jewelry [6][7]. - The current new consumption trend is characterized by structural growth driven by policy support, demographic changes, and technological advancements, with a focus on innovative products that meet evolving consumer needs [7][8].

Summary of Key Points from the Conference Call Industry Overview - The global healing economy is projected to reach $7 trillion by 2025, while China's emotional consumption market is expected to exceed 2 trillion RMB in the same year, with an annual compound growth rate exceeding 12% [1][2][3] - The cultural, film, and gaming industries are rapidly expanding, highlighting the importance of emotional value as a significant added value to products [1][3] Core Concepts and Arguments - Emotional value refers to the emotional satisfaction and psychological pleasure consumers derive from purchasing and using products. It encompasses both narrow emotional consumption sectors (e.g., trendy toys, stress-relief toys, emotionally-driven jewelry, and pets) and a broader range of products that must create emotional value [2][4] - Companies can enhance emotional value by improving product added value, increasing consumer pleasure, and boosting conversion rates. Traditional companies in sectors like pets, trendy toys, and jewelry have successfully attracted loyal users through innovative design and marketing strategies [1][4] - The Chinese market has vast potential for developing emotional value, with a focus on "starting with emotion and being loyal to management" to build sustainable, high-quality brand power [1][6] Risks and Considerations - The emotional value sector faces volatility risks, and investors should closely monitor industry dynamics and leading companies' performances while being cautious of over-reliance on single trends or short-term fads [1][7] - As GDP per capita increases, consumer demand is shifting from functional value to emotional and group value, indicating a need for companies to adapt to these changing consumer preferences [1][8] Market Dynamics - The increase in supply-side functional value disparity has concentrated asset value among a few brands, thereby elevating the importance of emotional value [1][10] - Rising incomes among younger generations (90s and 00s) drive higher demand for emotional value, as their spending structures differ significantly from previous generations [1][11] Strategic Insights - Companies should leverage AI and digital tools to capture consumer needs accurately and build a diverse product matrix to meet various consumer demands [2][16][17] - Agile supply chains are crucial for meeting emotional consumption needs, allowing companies to respond quickly to market changes [2][18] - Social media dynamics can enhance brand development and maximize channel efficiency by resonating emotionally with consumers [2][19] Case Studies and Examples - Companies like Bandai and Xiaomi exemplify successful emotional value strategies, with Bandai leveraging a mature platform for IP operations and Xiaomi transforming its automotive products into emotional carriers through user-centric design and ecosystem integration [2][21][27] - Shoujin Holdings demonstrates how social attributes can drive market value growth, emphasizing cultural representation and product quality [2][23] Conclusion - Emotional value is not limited to specific sectors but can be integrated into various traditional industries, suggesting a long-term strategic focus for companies aiming to enhance brand loyalty and consumer engagement [2][24][25] - Investors should remain vigilant against market exuberance and focus on sustainable growth factors to mitigate risks associated with emotional value investments [2][29]