Core Viewpoint - The recent surge and volatility in gold prices have sparked a new wave of investment interest in gold, significantly impacting companies across the gold industry chain [1][2]. Impact on Industry Chain - The high gold prices have had varying effects on companies within the gold industry chain. Upstream gold mining companies have benefited from increased revenues and profits, as evidenced by the third-quarter reports of listed gold mining companies, which showed substantial year-on-year growth in both revenue and net profit [5][4]. - Conversely, downstream gold jewelry companies have faced challenges, with many reporting declines in performance during the same period. For instance, companies like Zhou Dashing, Mingpai Jewelry, and Laofengxiang experienced revenue declines, with Mingpai Jewelry's net profit plummeting by over 1500% [5][6]. Performance Data - Specific performance metrics for jewelry companies include: - Zhou Dashing: Revenue down 37.35%, net profit up 3.13% - Mingpai Jewelry: Revenue down 25.37%, net profit down 1502.07% - Laofengxiang: Revenue down 8.71%, net profit down 19.05% - China Gold: Revenue down 1.74%, net profit down 55.08% [6]. Market Demand Trends - Despite the challenges, the overall demand for gold jewelry in China showed a quarter-on-quarter increase of 21% in the third quarter of 2025, although it still represented an 18% year-on-year decline. The total gold jewelry consumption for the first three quarters of 2025 was 278 tons, down 25% year-on-year [7]. Company Strategies - Companies are actively seeking strategies to mitigate the impact of high gold prices. For example, Zhou Dashing has reported a stable inventory level and is closely monitoring gold price fluctuations to adjust pricing accordingly. They are also focusing on product innovation and market expansion to meet diverse consumer needs [10][11]. - Zhou Dafu Jewelry Group has highlighted a positive trend in sales, particularly in their priced gold products, which saw a 43.7% year-on-year increase in retail value during the second quarter of the 2026 fiscal year [8]. Historical Context and Future Outlook - Historically, gold has been a safe-haven asset, with its price increasing significantly over the past decade. However, it is also subject to volatility and has experienced substantial corrections in the past [13][14]. - Looking ahead, analysts suggest that while short-term fluctuations may occur, the long-term outlook for gold remains positive due to ongoing global economic uncertainties and the trend of central banks accumulating gold [13].

Core Viewpoint - The new gold tax policy has led to fluctuations in gold prices, impacting consumer behavior and prompting major jewelry brands like Chow Tai Fook to adjust their pricing strategies in response to increased costs associated with gold procurement and production [1][3]. Group 1: Impact of Gold Tax Policy - The new tax policy exempts individuals from value-added tax when selling used items, including gold jewelry, but frequent large-scale sales may be classified as "business sales" by tax authorities [1]. - Chow Tai Fook announced a price adjustment for certain gold products starting November 3, citing additional costs from the new tax policy [1][3]. - Major gold retailers, including Chow Tai Fook, experienced significant price increases, with some brands raising prices by over 5% in a single day [1]. Group 2: Financial Performance and Strategy - Chow Tai Fook reported a 43.7% year-on-year increase in retail value for its priced gold products during the third quarter [3]. - The company emphasizes its focus on product design, service quality, and customer relationships to maintain a reasonable profit margin [3]. - Chow Tai Fook utilizes financial tools to hedge risks and maintains stable gold inventory levels aligned with production and sales needs, rather than solely capitalizing on price increases [3].

Core Viewpoint - The new gold tax policy has led to fluctuations in gold prices, impacting consumer behavior and prompting major jewelry brands to adjust their pricing strategies [2][3]. Group 1: Tax Policy Impact - The new tax policy exempts individuals from value-added tax when selling used items, including gold jewelry, unless the sales are deemed "business activities" due to frequency or scale [2]. - Major jewelry brands, including Chow Tai Fook, have raised gold prices in response to increased procurement and production costs associated with the new tax policy [2][3]. Group 2: Price Adjustments - On November 3, 2023, Chow Tai Fook and other major gold retailers increased prices, with some brands experiencing daily price hikes exceeding 5% [2]. - Chow Tai Fook previously raised retail prices for gold products by 12%-18% last month and had already implemented a 10%-20% price adjustment earlier this year [2][3]. Group 3: Sales Performance - Chow Tai Fook reported a 43.7% year-on-year increase in retail value for priced gold products during the third quarter [3]. - The company noted a recovery in same-store sales across mainland China, Hong Kong, and Macau, driven by strong demand for priced products [3]. Group 4: Business Strategy - Chow Tai Fook emphasizes the importance of product design, service quality, and customer relationships in its business model [3]. - The company utilizes financial tools to hedge risks and maintains stable gold inventory levels aligned with production and sales needs, rather than focusing solely on price appreciation [3].

Core Viewpoint - The recent adjustments in tax rates for gold and diamonds are expected to directly impact the pricing strategies of leading jewelry brands, particularly those promoting diamond-studded gold products. The announcement of these tax changes has created a sense of urgency and uncertainty in the market, especially with the sudden implementation of the gold tax policy on November 1, 2023 [3][7]. Tax Policy Changes - The announcement from the Ministry of Finance and the State Administration of Taxation regarding gold tax policies was released on October 29, 2023, and is effective from November 1, 2023, until December 31, 2027. This announcement also repeals previous tax regulations from 2002 and 2008 [3][7]. - The new tax policy categorizes gold usage into investment and non-investment types, with more significant tax adjustments for non-investment purposes. Non-investment gold transactions will be exempt from VAT and can issue ordinary invoices, allowing buyers to deduct 6% of the invoice amount as input tax [7][15]. Market Reactions - Initial observations from jewelry stores in South China on the day of the new tax policy's implementation indicated that the price adjustments had not yet been reflected in the products available for sale [8][10]. - Leading jewelry brands, such as Chow Tai Fook and Lao Pu Gold, have been pushing fixed-price gold products, which are not directly tied to fluctuating gold prices. These products have shown strong revenue-generating capabilities, as evidenced by Chow Tai Fook's recent financial performance [8][10]. Industry Impact - The new tax policy is expected to have a cascading effect on the entire gold industry supply chain, particularly affecting wholesalers and retail stores. The increase in tax burden on raw materials will likely compel retailers to raise prices [10][12]. - The potential rise of gold processing shops is anticipated, as consumers may seek to purchase investment-grade gold directly from banks and then process it independently, circumventing the new tax implications [12][15]. Consumer Behavior - Despite the uncertainty surrounding price adjustments due to the new tax policies, consumer interest in gold-studded products remains high, with significant foot traffic observed in stores on the policy's implementation day [10][12].

Core Viewpoint - The adjustment of gold and diamond tax rates is expected to increase the cost of purchasing jewelry, impacting leading brands' pricing strategies in the market [1][2]. Group 1: Tax Policy Changes - The announcement regarding the adjustment of gold tax rates was made on October 29, effective from November 1, 2023, until December 31, 2027, which has led to the cancellation of previous tax policies [1]. - The diamond tax rate adjustment was announced earlier, allowing the market to prepare, while the gold tax policy change was more sudden [1]. Group 2: Impact on Jewelry Brands - Leading jewelry brands like Chow Tai Fook and Lao Pu Gold have been pushing fixed-price gold products, which are not directly tied to fluctuating gold prices, indicating a shift in pricing strategy [2]. - The recent tax adjustments have created pressure on brands, although it remains unclear if they will raise prices in response to the new tax policies [2]. Group 3: Industry Chain Effects - The impact of the new gold tax policy is anticipated to be most significant on the B-end of the gold industry chain, including suppliers, wholesalers, and retail stores [3].

Core Viewpoint - The gold retail sector is experiencing mixed results amid rising gold prices, with some companies reporting positive growth in retail value and net profit, while facing challenges from store closures, particularly among franchise outlets [1][5][10]. Group 1: Financial Performance - Chow Tai Fook's retail value increased by 4.1% year-on-year in Q3, while Luk Fook's overall retail value rose by 18% [1][6]. - Zhou Dasheng reported a net profit growth of 13.57% attributable to the high gold prices and increased consumer spending [1][6]. - Despite the growth in retail value, the number of closed stores continues to rise, with Chow Tai Fook closing 296 stores and Luk Fook closing 49 stores in Q3 [1][12]. Group 2: Market Dynamics - The increase in retail value is supported by three main factors: high gold prices leading to higher average transaction values, an increase in the proportion of priced products sold, and strong growth in e-commerce channels [6][7]. - In Q3, Chow Tai Fook's same-store sales in mainland China grew by 7.6%, while same-store sales volume decreased by 8.6%, indicating a shift towards higher-priced items [6][7]. - E-commerce sales for Chow Tai Fook grew by 28.1% year-on-year, contributing significantly to overall retail value despite a general slowdown in physical store performance [7][8]. Group 3: Franchise Model Challenges - The franchise model, which has been a key growth strategy for many gold jewelry brands, is facing scrutiny as many franchise stores are underperforming and closing [1][10][12]. - As of September 30, Chow Tai Fook had 6,041 stores globally, with over 4,000 being franchise stores, highlighting the reliance on this model [11]. - The trend shows a shift towards increasing self-operated stores, with Zhou Dasheng opening 47 self-operated stores in the first nine months of the year, while closing 333 stores overall [14].

Core Viewpoint - The article discusses the mixed performance of gold retail companies amid rising gold prices, highlighting both growth in retail values and ongoing challenges with franchise store closures [1][4]. Group 1: Financial Performance - Several gold jewelry brands reported positive retail value growth in Q3, with Chow Tai Fook's retail value increasing by 4.1%, Luk Fook's overall retail value rising by 18%, and Zhou Dasheng's net profit growing by 13.57% [1][4]. - Despite the growth, the "store closure wave" continues, particularly affecting franchise stores, with Chow Tai Fook closing 296 stores and Luk Fook closing 49 stores in Q3 [1][4]. Group 2: Factors Supporting Growth - Three main factors contributed to the retail value growth: high gold prices leading to increased average transaction values, a higher proportion of priced products sold, and strong growth in e-commerce channels [4][6]. - In Q3, Chow Tai Fook's same-store sales in mainland China grew by 7.6%, while same-store sales volume decreased by 8.6%, indicating a shift towards higher-priced products [4][6]. Group 3: E-commerce Performance - E-commerce channels showed significant growth, with Chow Tai Fook's e-commerce retail value increasing by 28.1% in Q3, contributing 6.7% to total retail value and 15.5% to sales volume [6]. - Luk Fook also reported that its retail value in mainland China rose by 20%, driven primarily by e-commerce business [6]. Group 4: Franchise Model Challenges - The franchise model, which allowed rapid expansion of store networks, is now facing challenges as many franchise stores are underperforming and closing [8][9]. - As of September 30, Chow Tai Fook had 6,041 stores globally, with over 4,000 being franchise stores, while Zhou Dasheng had 4,675 stores, with 4,275 being franchises [8]. Group 5: Shift to Self-operated Stores - Despite the reduction in franchise stores, self-operated stores are increasing, with Zhou Dasheng opening 47 self-operated stores in the first nine months of the year [9]. - The gross profit margin for self-operated stores is higher than that of franchise stores, indicating a potential shift in strategy towards more self-operated outlets [9].

Core Viewpoint - After reaching historical highs, international gold prices have begun to decline, yet major brands are still increasing the prices of their gold jewelry products [1] Group 1: Price Adjustments by Major Brands - Laopuhuangjin has announced its third price increase of the year, with some ancient-style gold jewelry prices rising by over 20% [1] - Chow Tai Fook plans to raise retail prices of gold products by 12% to 18% by the end of October, citing a mechanism to monitor gold price fluctuations for timely adjustments [1] Group 2: Market Dynamics and Performance - Despite the recent drop in spot gold prices, leading brands are raising prices to enhance the proportion of processing fees and maintain stable gross margins [1] - Laopuhuangjin reported a revenue of 12.354 billion yuan, a year-on-year increase of 251%, and an adjusted net profit of 2.35 billion yuan, up 291% [1] - The gross margin for Laopuhuangjin slightly decreased to approximately 38.1% during the reporting period due to the rapid increase in gold prices following price adjustments [1] Group 3: Gold Price Trends and Market Sentiment - Spot gold prices fell nearly 2% to $4,030 per ounce, while futures prices also dropped close to 2% to $4,055 per ounce [1] - Analysts suggest that the recent decline in gold prices is due to profit-taking by long positions after a sustained increase since September [1] - Most market institutions believe that gold prices will likely remain high in the short term, with some expecting a long-term upward trend to continue [1]

Company Performance - The company reported a retail value growth of 18% year-on-year for 2QFY26, with retail values in mainland China, Hong Kong, Macau, and overseas increasing by 20% and 13% respectively [1] - Same-store sales in mainland China for self-operated and brand stores grew by 3% and 27%, while same-store sales in Hong Kong, Macau, and overseas markets increased by 11% [1] Retail Growth Acceleration - Retail growth in 2QFY26 accelerated compared to previous quarters, with group retail value and same-store sales increasing by 18% and 10% year-on-year respectively [1] - The growth in mainland China was primarily driven by priced gold products, which accounted for 15% of retail during the quarter [1] Gold Product Performance - Priced gold products continued to perform strongly, with same-store sales in mainland China for self-operated and brand stores growing by 3% and 28% respectively [2] - The same-store sales for priced gold products in Hong Kong, Macau, and overseas markets turned positive, increasing by 6% [2] October Sales Trends - Sales momentum continued positively in October, with same-store sales in mainland China and Hong Kong, Macau, and overseas regions growing by 16%/51% and 19% respectively during the period from October 1 to 14 [2] Earnings Forecast and Valuation - The company maintains its EPS forecasts for FY26 and FY27 at 2.55 and 2.99 HKD, with the current stock price corresponding to 10/9 times FY26/27 earnings [2] - The target price has been raised by 26% to 30.55 HKD, reflecting an 18% upside potential from the current stock price [2]

Group 1 - International gold prices have started to retreat after reaching historical highs, but brands like Laopu Gold have increased prices for gold jewelry, marking the third price hike this year [1] - Laopu Gold's price adjustments have led to significant increases in the prices of several popular gold products, with some rising over 20%, and certain items being out of stock or quickly selling out [1] - Chow Tai Fook plans to raise retail prices of gold products by 12% to 18% by the end of October, indicating a mechanism to monitor gold price fluctuations and adjust prices accordingly [1] Group 2 - Laopu Gold reported a substantial increase in revenue and profit for the first half of 2025, with revenue reaching 12.354 billion yuan, a 251% year-on-year increase, and adjusted net profit at 2.35 billion yuan, a 291% increase [2] - Despite the rapid growth, Laopu Gold's gross margin slightly declined to approximately 38.1% due to the impact of rising gold prices following price adjustments [2] - The recent drop in spot gold prices, which fell nearly 2% to $4,030 per ounce, is attributed to profit-taking by investors after a prolonged increase in gold prices since September [2] Group 3 - Goldman Sachs attributes the current sell-off in gold to speculative position liquidations and spillover effects from the silver market, rather than a deterioration in fundamentals [3] - Structural buying from central banks, ultra-high-net-worth individuals, and long-term asset allocation institutions continues to support gold prices [3] - Morgan Stanley views the recent decline in gold prices as a short-term correction rather than the end of a bull market, with ongoing global central bank purchases and geopolitical risks providing support for gold prices [3]