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Latest Price: 62.3
Change: +5.66
Change Rate: +9.99%
Trading Volume: 34,200 lots
Turnover: 212 million RMB
Turnover Rate: 1.08%
P/E Ratio: 12.44
Total Market Value: 32.6 billion RMB
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Latest Price: 16.55
Change: +0.46
Change Rate: +2.86%
Trading Volume: 86,900 lots
Turnover: 145 million RMB
Turnover Rate: 0.80%
P/E Ratio: 12.26
Total Market Value: 18.1 billion RMB
Check the stock market of this stock, real-time capital flow, deep data analysis, enter the Zhou Dasheng bar, Zhou Dasheng capital flow
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“In fact, the profit margin for gold products in the jewelry industry is very low, and businesses also bear the price risk brought by fluctuating gold prices. Looking at the hot market from another perspective, it is also a gambling market,” said Visa, a partner of a Shanghai gold wholesale company and a member of the Shanghai Gold Exchange, to reporters.
The fluctuation of gold prices has unsettled investors and posed a significant challenge to industry manufacturers. Lao Feng Xiang (600612.SH), among other interviewed manufacturers, stated that they would adjust the terminal sales price to offset the difference in gold prices. Zhou Dasheng (002867.SZ) also indicated that the company would use methods such as borrowing gold to repay gold as a risk hedge.
Recently, gold prices have reversed their previous rapid rise and entered a volatile phase. In mid-September, domestic gold prices broke through 470 RMB per gram, with gold jewelry prices exceeding 600 RMB per gram, and international gold prices also breaking through 1,940 US dollars per ounce, attracting countless consumers and investors to “chase high.” However, since September 25th, international gold prices have experienced a “nine-day decline” and hit a nearly seven-month low, and domestic gold prices have continued to fall, dropping to 446 RMB per gram on October 6th, a decrease of about 5% from mid-September. In the beginning of this week, the market reversed again, possibly influenced by international factors, and the gold price rose rapidly. By the 14th, the domestic gold price had risen to 463 RMB per gram, and the international gold price also rose by more than 5% this week, achieving the largest weekly increase in nearly seven months.
The rapidly fluctuating market primarily affects the end consumer market. “The short-term volatility of gold prices may slightly suppress terminal demand and make more consumers remain in a wait-and-see state,” said a Zhou Dasheng securities department personnel. Visa also told reporters that the company’s recent gold shipments were significantly lower than in the traditional gold sales off-season of stable and rising gold prices in July and August.
Sales are affected, and combined with the price difference caused by the decline in gold prices after hoarding, manufacturers are under considerable pressure. “In recent years, the price of gold has been on the rise, closely related to the risk aversion mentality of global consumers and investors. Rapidly rising and falling gold prices pose severe challenges to manufacturers, which means that the uncertainty of obtaining profits for manufacturers is increasing and brings great expectations and panic to consumers’ selection, which is not conducive to market stability and also affects the sales of gold products,” analyzed Zhang Yi, the chief analyst of iMedia Consulting.
Reporters visited several jewelry counters in shopping malls and learned that as of October 13th, brands such as Chow Tai Fook (01929.HK) and Luk Fook had reduced their gold prices compared to before the “Golden Week” holiday. The price of gold jewelry displayed was 587 to 588 RMB per gram. A staff member of a Van Cleef & Arpels counter stated that the gold price has been relatively stable after the holiday, with prices fluctuating only a few yuan overall. On the same day, the investment gold class of the mentioned brands showed a price range of 526 RMB to 536 RMB per gram, with a decrease of more than 10 RMB per gram compared to before, but the enthusiasm of young consumers to purchase 1-gram “gold beans” remains high.
From the perspective of interviewed manufacturers, the fluctuation of gold prices primarily affects the consumption of investment gold, and most large enterprises adopt methods to hedge losses.
“In terms of gold consumption, there are mainly two sources: investment and consumption. Our company actually combines both. The demand for consumption is mainly during holidays, like before the National Day holiday, when many people get married and need to buy gold jewelry. This kind of demand is not greatly affected by the fluctuation of gold prices. However, if it is pure investment, the impact of the volatility will be greater,” said another Zhou Dasheng securities department personnel. The company operates on a franchise and wholesale model and does not need to stock a lot of gold raw materials itself, so the inventory is relatively stable. At the same time, the company uses borrowing gold to repay gold from banks as a hedging measure.
An employee of the securities department at Lao Feng Xiang also stated that the company’s wholesale income accounts for the “largest portion.” For example, it was completely sold out in mid-September, so the impact is not significant. The retail business adjusts prices based on specific gold price circumstances. In addition, the company has measures to hedge against gold price volatility.
In this situation, small gold retailers bear more risks. Visa analyzed that if you consider the cost of capital, the profit margin for C-end retailers is