Summary of Conference Call on Gold Investment Industry Industry Overview - The gold investment sector has shown a continuous increase in sales over the past three years, characterized by significant growth and expansion. Sales in the first two months of 2026 approached 7 billion yuan, indicating strong market demand [1][3][13]. Key Insights - **Tax Advantages**: Member units of the gold exchange enjoy a tax burden advantage of 7%-8%. Non-member units must purchase raw materials through member units, leading to higher costs and significant price differences [1][3]. - **Operational Models**: Cai Bai Co. adheres to a fully self-operated model, which provides management advantages over the franchise system of China Gold, allowing for better sales control and store operations [1][4]. - **Profit Margins**: Investment gold companies typically establish raw material procurement departments to stock up based on trend predictions, achieving gross margins usually not lower than 7%, with overall controllable levels close to 10% [1][4]. - **Impact of Tax Reform**: Post-tax reform, non-member brands can only purchase raw materials through member units, increasing intermediate costs and leading to a price difference of 80-100 yuan compared to market prices [1][5]. Sales Forecasts - For Cai Bai Co., the projected sales for investment gold are approximately 9.7-9.8 billion yuan in 2024, nearly 17 billion yuan in 2025, and 7 billion yuan in the first two months of 2026 alone, indicating a strong upward trend [3][6]. Market Dynamics - **Gold Price Trends**: The gold market is expected to maintain a gradual upward trend due to factors such as U.S. debt issues and geopolitical conflicts. The recovery volume of investment gold bars is significant, but purchase volumes still exceed recovery volumes, reflecting long-term investment confidence [2][8]. - **Seasonal Performance**: Investment gold bars tend to perform better in May and September-October, coinciding with traditional wedding seasons and holiday consumption peaks, where promotional subsidies are often offered [9]. Procurement and Pricing Strategies - Procurement departments analyze sales data from the past 2-3 years to forecast future sales and adjust purchasing plans accordingly. Price fluctuations are managed based on historical patterns and geopolitical factors [6][7]. - The centralized management of repurchase business ensures that profits are not calculated on a store-by-store basis but rather managed collectively to optimize returns [10]. Regulatory Environment - Post-tax reform, the use of raw materials is strictly regulated, with clear distinctions between investment and jewelry purposes, making it difficult to manipulate usage for tax benefits [12]. Demand and Supply Dynamics - The sales performance in early 2026 was significantly strong, reflecting high public demand for investment gold. There were instances of supply shortages, with some stores lacking inventory and requiring pre-orders [13]. This summary encapsulates the key points from the conference call regarding the gold investment industry, highlighting trends, operational strategies, and market dynamics.

Group 1 - The international gold price has recently declined, with COMEX gold futures closing at $3247.4 per ounce on May 2, down 7.48% from the high of $3509.9 per ounce on April 22 [2] - Many gold jewelry brands have lowered their prices, with quotes generally falling below 1000 yuan per gram, and some brands offering prices as low as 858 yuan per gram during the May Day holiday [2][3] - The decline in gold prices, combined with holiday promotions, has increased consumer interest, leading to crowded stores and significant purchases, particularly in Shenzhen's gold market [3][4] Group 2 - There is a notable increase in gold recovery activities, with many customers visiting stores to sell their gold, driven by higher recovery prices compared to previous purchases [5] - The gold recovery market has seen a surge in activity, with daily recovery volumes reaching twice the normal levels during the May Day holiday [5] - Some institutions suggest that gold prices may experience further fluctuations in the short term, indicating a potential for additional declines [6]