As gold prices continue to climb, consumption of domestic gold jewelry in China has been notably suppressed, while demand for gold bars and coins, which carry stronger investment attributes, has risen rapidly year-on-year and significantly exceeds gold jewelry in absolute volume. However, benefiting from refined brand operations and product differentiation—often deeply linked with traditional Chinese culture—the sales proportion of fixed-price products at relevant companies has been increasing steadily. This trend has not only enhanced their overall profitability but also helped mitigate the cyclical impact of gold price fluctuations to some extent. Regarding investment targets, companies with strong branding, distinct differentiation, and active overseas expansion strategies are viewed favorably. The main perspectives are outlined below.

In 2025, amid persistently high gold prices, domestic gold jewelry consumption declined noticeably, whereas consumption of gold bars and coins grew rapidly compared to the previous year. According to the latest statistics from the China Gold Association, China’s total gold consumption in 2025 reached 950.096 tons, down 3.57% year-on-year. Within this total, gold jewelry consumption accounted for 363.836 tons, falling 31.61%, while gold bar and coin consumption reached 504.238 tons, rising 35.14%. By the end of December 2025, the closing price of Au9999 gold on the Shanghai Gold Exchange had increased by 58.78% from the beginning of the year. High gold prices have clearly restrained demand for gold jewelry, while spurring faster growth in more investment-oriented products like bars and coins, which now far surpass jewelry in absolute terms. The impact of high gold prices on the consumption structure of gold jewelry is expected to persist into 2026.

Amid the gold price surge, the sector has shown notable divergence, with a few leading companies displaying strong branding and differentiation continuing to achieve rapid growth. Despite industry-wide pressure in 2025, companies with strong brand operations—typically positioned in the high-end or light luxury segments—and clear product differentiation have demonstrated robust growth. Examples include CHJ Group (announcing a 125%-175% increase in non-GAAP net profit for 2025, reflecting strong branding and differentiation), Caibai Shares (posting a 39%-64% rise in non-GAAP net profit for 2025, benefiting from a high proportion of investment gold products), MCL (reporting a 26% increase in non-GAAP net profit for the first three quarters of 2025, with a light luxury brand positioning), CHOW TAI FOOK (achieving 16.9% sales growth in Mainland China during Q4 2025, including a 53.4% same-store sales surge for fixed-price products, supported by its high-end positioning and differentiation), and LUK FOOK HOLD (registering a 43% increase in non-GAAP net profit for the first half of fiscal 2026, with a mid-to-high-end positioning and strong product differentiation). Thanks to sophisticated brand management and product differentiation—often tied to traditional Chinese culture—these companies have seen a rising share of fixed-price product sales, boosting overall profitability and partially cushioning against gold price volatility. In contrast, many companies that previously relied on wholesale and franchise-based expansion models, with weaker brand operations and digital capabilities, have faced significant operational pressure amid the sustained gold price increases in 2024 and 2025.

With the growing confidence and global rise of Chinese culture, overseas expansion represents a major opportunity for domestic gold jewelry brands in the future. In recent years, many Chinese gold jewelry brands have accelerated their overseas efforts, starting in Southeast Asia and gradually expanding to Australia and North America, achieving positive results. As Chinese culture and aesthetics gain prominence worldwide, domestic gold jewelry brands have substantial room for international growth, which is expected to provide medium- to long-term growth momentum for leading companies. Looking ahead to 2026, high gold price pressures are likely to persist, and divergence within the gold jewelry sector will continue. However, the overall channel cleanup in the sector is gradually nearing completion. In terms of investment opportunities, companies with strong branding, clear differentiation, and active overseas expansion plans are favored. CHJ Group is particularly recommended, while LAOPU GOLD is also worth watching. Related targets include CHOW TAI FOOK and LUK FOOK HOLD. On an annual basis, attention should also be given to potential turnaround opportunities for Lao Feng Xiang and Chow Sang Sang in the new year.

Risks include a slower-than-expected recovery in domestic discretionary consumption and the impact of short-term sharp fluctuations in gold prices on gold jewelry consumption.