ZHOU LIU FU (06168) surged over 10% in afternoon trading. As of press time, the stock was up 8.2% to HK$47.48, with turnover reaching HK$94.24 million. On the news front, ZHOU LIU FU plans to hold a board meeting on August 22 (this Friday) to approve interim results.

Guohai Securities previously noted that ZHOU LIU FU achieves rapid low-cost expansion through its franchise model, with franchise stores accounting for as high as 98% of total outlets, giving the company profitability advantages over peers. As of December 31, 2024, ZHOU LIU FU operated a total of 4,129 stores, with franchise stores comprising approximately 98%, and stores in tier-three and lower-tier cities accounting for 55.1%, providing deep coverage of the sinking market.

The franchise business adopts a dual-track model of "product sales + service fees." In 2024, service fees accounted for 29.4% of total franchise store revenue, with service fee gross margin reaching as high as 97.1%, driving the company's overall gross margin to 25.9%, significantly outperforming peers such as Lao Feng Xiang and China Gold.

Additionally, Hang Seng Indexes Company will release its mid-year review results on August 22, with related changes to be implemented after market close on September 5 and take effect from September 8. According to Huatai Securities' forecast, ZHOU LIU FU is expected to be included in the Stock Connect scope in September.

CITIC Securities believes that ZHOU LIU FU has developed rapidly through its asset-light model focusing on integrated R&D and designated supplier sourcing, along with franchise policies more attractive than peers. As the mass jewelry market trends toward lightweight and fashionable products, the company's asset-light model better ensures efficiency. Meanwhile, the company balances innovation and plans to focus on enhancing brand momentum and deeply exploring domestic and overseas gold jewelry consumption markets in the future.