Chow Tai Seng Jewellery Co., Ltd. has announced an increase in the brand usage fee for some of its gold products. On the evening of April 14, the company issued a notice regarding the adjustment of brand usage fees for certain items. The notice states that the brand usage fee for gram-weight-based gold products under the main Chow Tai Seng brand and its classic franchise channels will be uniformly raised from 12 yuan per gram to 24 yuan per gram. The fee standard for piece-based gold products remains unchanged. These new rates will take effect starting April 14, 2026.
The adjustment is attributed to the company's comprehensive push for retail transformation, product upgrades, and deeper support for franchise operations, aiming to enhance the overall competitiveness of the brand. This decision was made after considering the current development trends in the gold jewelry consumer market, the company's strategic resource investments, and its medium to long-term brand development plans. The notice also highlighted that the impact of this fee adjustment on the company's future performance remains uncertain, with final figures to be confirmed in the company's periodic reports. Investors are advised to be aware of the associated risks.
According to Chow Tai Seng's 2025 interim report, the brand usage fee refers to the charge paid by franchisees or other authorized parties for the right to use the "Chow Tai Seng" brand when selling products sourced from the company's designated suppliers, after the goods have passed quality inspection. In the first half of 2025, the average number of franchise stores was 4,497, with average single-store brand usage fee income reaching 82,000 yuan, a year-on-year increase of 9.62%.
The company's 2025 third-quarter report showed that revenue for the first three quarters of the previous year totaled 6.772 billion yuan, a decrease of 37.35% year-on-year. Net profit attributable to shareholders reached 882 million yuan, an increase of 3.13% year-on-year. Breaking down by quarter, revenue in the third quarter was 2.175 billion yuan, with the rate of decline narrowing to 16.71% compared to the same period last year, showing a significant improvement over the first half of the year. Net profit for the quarter was 288 million yuan, up 13.57% year-on-year.
By product category, revenue from inlaid jewelry products in the first three quarters was 556 million yuan, down 4.89% year-on-year, accounting for 8.22% of total revenue. Revenue from plain gold products was 4.942 billion yuan, a decrease of 44.44% year-on-year, representing 72.98% of total revenue. Revenue from brand usage fees was 569 million yuan, an increase of 3.03% year-on-year.
By business channel, the overall revenue decline for the first three quarters was primarily due to weaker performance in the franchise channel. Franchise distributors showed low willingness to replenish inventory in the short term, influenced by high gold prices and subdued consumer demand in stores, leading to a year-on-year decrease in franchise channel revenue.
Analysis indicates that the proportion of revenue from franchise business in the first three quarters of the previous year fell to nearly 50%, down from over 70% in the same period the year before. Franchise business revenue was 3.345 billion yuan, a decrease of 56.34% year-on-year. Within this, wholesale sales revenue from inlaid products was 336 million yuan, down 15.79%, while wholesale sales revenue from gold products was 2.311 billion yuan, down 64.58%. The financial report also noted that self-operated and e-commerce businesses performed better than the overall average during the reporting period, emerging as growth highlights.
At the market close on April 14, Chow Tai Seng's share price was 12.37 yuan per share, an increase of 5.10%.
Driven by international gold prices, the price of pure gold jewelry from domestic jewelry brands has continued to rise, with several major brands having already increased their product prices.
Considering the impact of persistently high gold prices on costs, the Chow Tai Fook Group raised the retail prices of its priced gold products in late October 2025, marking its second price adjustment that year. The increase for most products was estimated to be between 12% and 18%. At the time, Chow Tai Fook stated that consumer demand for different gold products across various segments remained robust, and the company would continue to meet diverse consumer needs through innovative designs, optimized services, and market insights, while actively exploring new markets.
On February 28 of this year, it was reported that Lao Feng Xiang implemented its first price adjustment for 2026, with increases ranging from 20% to 30%. For example, the price of a necklace weighing approximately 20.8 grams rose from about 47,300 yuan to 60,100 yuan, an increase of 27.6%. According to previous reports, following its third price adjustment in 2025, Lao Feng Xiang's gross profit margin returned to above 40%.
Unlike the widespread franchise model common among other gold retailers, Lao Feng Xiang has consistently cultivated a high-end brand image. Its products are predominantly sold at fixed prices, meaning prices do not fluctuate daily with changes in the gold market. Overall, its pricing strategy positions it between luxury brands and ordinary gold stores.