Gold prices have reclaimed the thousand-yuan mark, yet the gold and jewelry industry is experiencing mixed fortunes. In its recently released 2026 semi-annual report, Guangdong Chj Industry Co.,Ltd. (002345) posted growth in both revenue and profit. However, beneath the surface success, deep-seated anxieties remain.
Compared with previous half-year reports, Guangdong Chj Industry Co.,Ltd. saw significantly slower revenue growth in the first half of 2026, with a year-on-year increase of just 6.65%—the lowest half-year growth rate in four years. While net profit attributable to shareholders rose 27.42% year-on-year, maintaining double-digit growth, this marks a noticeable decline from the 44.34% profit growth recorded in the first half of 2025. Looking at the channel structure, the company has exhibited a clear "shrinking direct operations, expanding franchising" trend in recent years. From the end of 2022 to June 2026, its directly operated jewelry stores dropped from 324 to 172, a cumulative net reduction of 152 stores over four years, as its core direct-sales foundation continues to erode.
Based on calculations from the semi-annual report, the top ten stores by revenue generated a combined 164 million yuan in revenue during the first half of the year. The flagship "CHJ Wuxi Huiju Store" achieved 33.85 million yuan in revenue, yet its operating profit margin remained below 15%. In stark contrast, Laopu Gold posted an average single-store revenue exceeding 500 million yuan—more than three times the combined revenue of all ten of Guangdong Chj Industry Co.,Ltd.'s top-performing stores. The efficiency gap between the two is unmistakable.
A Closer Look: Revenue Growth Slowing, Quarterly Figures Nearly Stalled
The first half of 2026 delivered an unprecedented chill to China's gold jewelry sector. According to the China Gold Association, domestic gold jewelry consumption fell to just 132.133 tonnes, a 33.88% year-on-year decline. The industry-wide downturn is clearly reflected in the operational data of leading brands. Chow Tai Seng Jewellery Co Ltd saw first-half revenue fall 20.79% and net profit drop 24.24%, with a net closure of 473 stores. Lao Feng Xiang Co Ltd experienced a 40.08% revenue decline and a 41.34% drop in net profit attributable to shareholders, alongside continued store network reductions. Chow Tai Fook also accelerated its channel optimization, closing a net 896 stores in mainland China in fiscal 2025 and 969 stores in fiscal 2026.
Against this backdrop, Guangdong Chj Industry Co.,Ltd. managed to deliver growth in both revenue and profit, at least on paper outperforming most peers. The semi-annual report shows first-half operating revenue of 4.374 billion yuan, up 6.65% year-on-year; net profit attributable to shareholders of 422 million yuan, up 27.42%; and non-GAAP net profit of 421 million yuan, up 27.63%.
By business segment, jewelry remains the company's core revenue driver, generating 4.261 billion yuan in the reporting period—97.40% of total revenue—up 7.33% year-on-year. Fashion jewelry products performed particularly well, contributing 2.326 billion yuan, a 16.84% increase, with its share rising to 53.16%. Traditional gold products, however, saw revenue decline 5.71% to 1.726 billion yuan due to high and volatile gold prices.
Dissecting the quarterly data reveals underlying concerns. Revenue growth of just 6.65% in the first half marks the slowest half-year pace in four years. While net profit rose 27.42%, the momentum has clearly cooled from the 44.34% growth seen in the first half of 2025. The pressure concentrated in the second quarter: Q2 revenue was 1.876 billion yuan, up only 1.43% year-on-year—a near standstill compared with Q1's 10.93% growth. Similarly, Q2 net profit attributable to shareholders increased 11.35% to 158 million yuan, a sharp deceleration from Q1's 39.52% rise.
Zhou Ting, a luxury industry expert and dean of the Key Research Institute, noted that this is not a simple short-term fluctuation but rather a signal that the growth ceiling of Guangdong Chj Industry Co.,Ltd.'s IP-driven traffic model is becoming visible. "In Q2, falling gold prices directly undermined the underlying consumption value of gold jewelry," she explained. "At the same time, a traffic-selling model reliant on non-owned IP has a natural lifecycle. Once the novelty of the IP fades and traffic costs rise, sales growth immediately comes under pressure. This model is essentially monetizing traffic through IP popularity rather than genuine brand value growth—it lacks sustainability and has a clearly visible ceiling."
One Laopu Gold Store Matches Thirty Chj Stores?
The challenges in Guangdong Chj Industry Co.,Ltd.'s channel strategy are intensifying. The company has shifted decisively toward a "shrinking direct operations, expanding franchising" approach, but overall store expansion has slowed markedly. From 2023 to 2025, annual net store additions stayed around the hundred-store level, with 159 net new stores added in 2025. Yet in the first half of 2026, total stores inched up from 1,670 to just 1,682—a net addition of only 12 stores—signaling a clear slowdown and a possible bottleneck in scale expansion.
The company's high-margin direct-operated stores have been steadily phased out, falling from 324 at the end of 2022 to just 172 by June 2026—a cumulative net reduction of 152 stores over four years. In the first half of 2026 alone, 12 more direct stores were closed, bringing the count from 184 to 172. Correspondingly, direct-operating revenue plunged 17.61% year-on-year, from 1.128 billion yuan to 929 million yuan, as the core direct-sales foundation continues to weaken. While the remaining direct stores lifted channel gross margins by 13.34 percentage points to 44.86%, this high margin is achieved on the back of shrinking store numbers and revenue, diminishing direct operations' contribution to the overall business.
Franchise revenue, meanwhile, grew 14.24% year-on-year to 2.535 billion yuan, becoming the company's primary growth engine. However, this channel carries a gross margin of only 22.65%, well below the direct-operating level. Even this franchising pillar is losing steam, with only 24 net new franchise stores added in the first half, bringing the total to 1,510. While franchise additions have partly offset direct-store closures and kept the overall store count rising, the momentum behind franchise expansion has clearly weakened.
Notably, the semi-annual report disclosed operating data for the top ten direct-operated jewelry stores by revenue. Calculations show these ten best-performing stores generated approximately 164 million yuan in combined revenue in the first half of 2026, averaging about 16.4 million yuan per store. The highest-grossing "CHJ Wuxi Huiju Store" brought in 33.854 million yuan in revenue but only 4.7849 million yuan in operating profit—an operating margin of under 15%. By comparison, according to Frost & Sullivan data, Laopu Gold averaged over 500 million yuan in sales across the 35 shopping malls it operates in during the first half of 2026, ranking first globally among luxury groups for both per-store sales and sales per square meter. Except for malls like Beijing SKP, Laopu Gold operates just one store in most locations, meaning a single Laopu Gold outlet generates roughly the same output as 30 of Guangdong Chj Industry Co.,Ltd.'s top-tier direct stores—a stark illustration of the efficiency divide.
Second Attempt at Hong Kong Listing: The "Hard Truths" Behind Impressive Numbers
Amid lingering financial pressures, Guangdong Chj Industry Co.,Ltd.'s appetite for capital markets has grown increasingly urgent. Founder Liao Muzhi began in traditional gold purchasing and processing, and his son Liao Chuangbin left school in 1989 at age 16 to join the family business. The "CHJ" brand was officially launched in 1997 and listed on the Shenzhen Stock Exchange in 2010. In September 2025, the company filed its first prospectus with the Hong Kong Stock Exchange, but the application lapsed in March 2026 after failing to complete the review process within six months. Just days later, on April 2, the company resubmitted its application, making a second push for an "A+H" dual listing.
Behind the glossy financials, two intellectual property lawsuits involving international luxury giants stand out as unavoidable "flaws" in the prospectus. According to the filing, Guangdong Chj Industry Co.,Ltd. faces infringement claims from Italian luxury group Bulgari and Cartier, owned by Switzerland's Richemont. Bulgari alleges that certain product designs copied the fan-shaped trademark of its "Diva's Dream" collection, seeking 5 million yuan in damages. A first-instance court ruling in December 2025 ordered the company to pay 1.1 million yuan and issue a public statement; Guangdong Chj Industry Co.,Ltd. has appealed, and the case remains under second-instance review.
The more complex dispute involves Cartier, which accuses the company of infringing the iconic screw-lock design of its "Love" collection. The case was split into separate trademark infringement and unfair competition claims. In July 2025, the court ruled against Guangdong Chj Industry Co.,Ltd. in the unfair competition case, ordering it to pay 1 million yuan, with its subsidiary Guangdong Chaohui bearing joint liability. These consecutive first-instance losses cast a shadow over the company's much-touted original design credentials. The prospectus shows provisions of 3 million yuan set aside for the infringement cases across fiscal 2024 and 2025. But beyond financial compensation, the damage to brand reputation may prove more enduring—"original design" has been a core selling point for Guangdong Chj Industry Co.,Ltd., and if the plagiarism allegations are confirmed, the impact on consumer perception could be severe.
In visits to several Guangdong Chj Industry Co.,Ltd. stores in Beijing, the sales staff recommended numerous styles closely resembling Laopu Gold's bestsellers. One salesperson remarked candidly, "We carry many of the same designs as Laopu at better prices. Right now, no one can really say who's the original—all the better-performing stores carry these styles. There are slight differences, of course, because identical designs would raise copyright issues."
Zhou Ting added that the setback in Guangdong Chj Industry Co.,Ltd.'s Hong Kong IPO, while superficially a matter of regulatory compliance inquiries, fundamentally reflects the market's lack of confidence in the profitability certainty of its business model. "Fundraising allocations, IP disputes, financial transparency in the franchise channel, and controlling shareholder share pledges are all surface-level regulatory issues," she said. "The core problem is that its IP-driven model has low barriers to entry and is easily replicated. Without building an irreplaceable core brand advantage, the sustainability and stability of its earnings remain questionable—and that's the central concern for Hong Kong investors."