In the global luxury goods market, China's gold jewelry industry is attracting investor attention with its unique positioning. According to the latest industry report from Bank of America, despite moderate overall growth (3% CAGR 2019-2024, projected 4% for 2024-2029), leading brands are reshaping the industry landscape through product innovation and cultural empowerment. Among them, CHOW TAI FOOK (01929) and LAOPU GOLD (06181) have emerged as industry focal points with their distinctive strategies.

**Market Scale: One-Third of the Global "Gold Territory"**

In 2024, China's gold jewelry retail market reached $114 billion, accounting for 31% of the global market, equivalent to the combined markets of the United States and Europe. From a growth driver perspective, rising gold prices (11% CAGR), product innovation, and store expansion are the core engines. Notably, China's per capita annual consumption of $81, while higher than the global average ($45), still lags behind Hong Kong ($663) and Taiwan ($236), indicating untapped market potential.

From a competitive landscape perspective, the industry is accelerating consolidation. The top 10 brands now hold 38% market share, up 14 percentage points from 2019. Domestic brands performed exceptionally well, capturing 8.7 percentage points of incremental share. CHOW TAI FOOK maintains its leading position with a 10% share, while LAOPU GOLD, despite ranking lower with a 1.2% share, shows rapid growth momentum, emerging as a "Guochao dark horse."

**Product Innovation: Culture and IP as Key Breakthrough Factors**

In this "low-growth track," product cycles are core to corporate breakthrough. The report identifies three major trends:

Guochao (Chinese trend) sweeps the market - LAOPU GOLD leverages "culture + craftsmanship" as its trump card, launching gourd and Buddha statue series that blend traditional handicrafts with auspicious meanings, achieving gross margins of 40%-50%. CHOW TAI FOOK combines Eastern aesthetics with modern design through "Forbidden City collaborations" and "Rogue series," with heritage gold products contributing 40% of revenue.

IP collaborations attract younger demographics - CHOW TAI FOOK partners with Doraemon, Sanrio, and other IPs to launch cute jewelry series, showing significant online sales growth. While LAOPU GOLD focuses on the high-end segment, it also attracts cultural consumer groups through the "Guochao" concept, with online sales exceeding 100 million yuan during the 618 shopping festival.

Emotional value drives consumption - In the current economic environment, products combining value preservation with auspicious meanings are more favored. LAOPU GOLD's "Vajra necklace" symbolizes protection, while CHOW TAI FOOK's "fish pattern designs" represent abundance, both becoming bestsellers.

**Channel Transformation: Online-Offline Synergy and Overseas Exploration**

Online becomes growth engine - Live-streaming e-commerce and social platforms have become important battlegrounds. In 2024, CHOW TAI FOOK's online sales reached 20% of total sales, while LAOPU GOLD achieved a 287% year-over-year surge in online sales through blockbuster products. However, online channels mainly feature lower-priced items, with high-margin premium products still relying on offline stores.

Overseas expansion targets Chinese diaspora markets - Both CHOW TAI FOOK and LAOPU GOLD are testing waters in Southeast Asia, with Singapore and Malaysia as preferred destinations due to dense Chinese populations. LAOPU GOLD's Singapore stores incorporate local culture, launching customized products like cross necklaces, while CHOW TAI FOOK enters the Japanese market through "cherry blossom" and "lucky cat" designs. Currently, overseas revenue accounts for less than 10%, but long-term potential is considerable.

**Investment Perspective: Growth Logic of Two Leading Companies**

**Profit Drivers: Products, Same-Store Sales Growth, and Point-of-Sale Expansion**

Bank of America views products as the ultimate profit driver. A popular product can accelerate same-store sales growth (SSSG). Strong same-store sales growth likely enhances individual store profitability, driving point-of-sale (POS) expansion to capture growing demand.

**What Happened During CHOW TAI FOOK's Last Profit Cycle (2018-2024)?**

During the 2018-2024 profit cycle, CHOW TAI FOOK launched a popular large-scale heritage gold product series called "Heritage" (HUA). Since its 2018 launch, the Heritage series continued growing, accounting for 39% of CHOW TAI FOOK's gold sales in FY2023. Peers followed suit with similar product lines. Given macroeconomic weakness, market saturation, intensified competition, and insufficient hot product launches, CHOW TAI FOOK's same-store sales growth slowed with net store closures. The company has focused on developing new products, launching series like Forbidden City collections and Rogue series to accelerate same-store sales growth again.

**LAOPU GOLD Initiates Another Product/Profit Cycle**

LAOPU GOLD features well-designed products with exquisite craftsmanship, embodying Chinese culture and auspicious meanings. With very strong same-store sales growth, LAOPU GOLD continues expanding its POS network. Bank of America believes other gold retailers are attempting to emulate LAOPU GOLD's approach. Whether LAOPU GOLD can maintain brand momentum through new product launches and whether other brands can keep pace remains to be seen.

**(1) CHOW TAI FOOK: Brand Transformation Unleashes Potential**

As the industry leader, the company is positioned to achieve positive same-store sales growth through store optimization (closing inefficient stores) and product upgrades. Currently trading at 18x P/E (2026 forecast) with projected 30% earnings growth (2026), Bank of America assigns a "Buy" rating.

**(2) LAOPU GOLD: High Growth + Valuation Advantage**

Leveraging high-end positioning and cultural scarcity, the company is expected to achieve 110% earnings CAGR for 2024-2026. Following recent share price corrections, P/E ratio has dropped to 24x (2025 forecast), highlighting attractive risk-reward ratio. Near-term catalysts include August analyst meetings and Hong Kong IFC store opening.

**Future Outlook: Cultural Empowerment + Globalization**

Bank of America believes the core opportunity in China's gold jewelry industry lies in "breaking through with culture": leading brands capture high-end markets through Guochao designs and IP innovation while expanding global share through overseas Chinese networks. For consumers, gold is no longer merely a value-preservation tool but a vehicle for cultural confidence and emotional expression - this perhaps represents the "high potential" hidden within the industry's "low growth" trajectory.

(Data source: Bank of America Global Research August 2025 series reports)