Summary of the Conference Call for Zhou Dasheng Company Overview - **Company**: Zhou Dasheng - **Industry**: Jewelry and Gold Retail Key Points and Arguments Impact of New Tax Policy - The new tax policy has had a minimal impact on terminal sales, with consumers showing a high acceptance of rising gold prices. Sales data from the week following the policy announcement indicated no decrease in gold jewelry sales, contrary to initial expectations [3][4][5] Price Adjustments - Retail guidance prices have been adjusted from 1.3 times to 1.37 times the Shanghai gold base, with wholesale prices also increasing to cover additional costs. The tax deduction for jewelry has decreased from 13% to 6%, adding approximately 7% to costs, which will be passed down to consumers [2][7][11] Consumer Behavior - The average transaction value at terminals is currently around 4,000 to 5,000 yuan, reflecting an increase from the previous year. Although consumer purchasing power has risen with gold prices, the overall sales volume has slightly declined due to a shift towards smaller items [5][16] Self-Operated Store Performance - Zhou Dasheng's self-operated stores are expected to see high revenue and gross profit growth in 2025, maintaining a strong performance even amid challenges in the franchise business. The company plans to focus on expanding high-quality direct stores in first- and second-tier cities in 2026 [14][15] Inventory and Supply Chain Management - As of the end of Q3, Zhou Dasheng's gold inventory was over 3 tons, primarily located in self-operated stores. Franchisees can reduce procurement costs by exchanging old materials for new ones, which currently accounts for about 50% of self-operated store transactions [12][25] Product Strategy - The company is focusing on lightweight products to reduce price sensitivity and enhance emotional value, while also upgrading high-end product lines to improve single-customer gross margins in response to declining sales volumes [17] Franchisee Dynamics - Franchisees are currently adjusting their store opening intentions due to the new tax policy, which is seen as a positive development that may help eliminate poorly performing stores and improve overall franchise quality [28] Future Plans and Developments - Zhou Dasheng plans to open new stores in cities like Zhengzhou and Xi'an, with a focus on ensuring that these locations align with the brand's strategic vision. The company is also exploring the launch of the "National Treasure" series stores, which have shown promising initial results [20][23] Financial Outlook - The mid-term dividend for 2025 has been issued, showing a decrease compared to 2024. Future dividends will depend on the stability or growth of profits [26] Sales Performance During Promotions - Sales during the Double Eleven shopping festival met expectations but did not exceed them. The impact of returns on revenue and gross profit is still being assessed [27] Revenue and Profit Projections - Revenue and profit projections for 2026 have not yet been finalized, with specific ranges expected to be communicated around April of the following year [29] Additional Important Information - The company has implemented a direct sales model for investment gold bars, which is currently being adjusted to enhance online sales capabilities [8][9] - The brand licensing fee model remains unaffected by the new tax policy, although suppliers will face increased costs that may be passed on to franchisees and consumers [11] This summary encapsulates the essential insights from the conference call, highlighting the company's strategic responses to market changes and consumer behavior in the jewelry industry.