Eliza Wong
Gold Market Momentum Drives Luxury IPO Wave
As gold prices break historical records, the precious metal is rapidly transforming from a traditional store of value into a dynamic financial instrument within capital markets. This gold rush has ignited unprecedented activity among gold jewelry enterprises seeking public listings. The Hong Kong IPO market continues demonstrating remarkable resilience, with multiple gold-related companies successfully going public despite global economic uncertainties.
Recent months have witnessed significant market movements: Lao Feng Xiang (老凤祥), Meng Jinyuan (梦金园), and Saturday Gold (周六福) have all launched successful Hong Kong listings. Chow Sang Sang (潮宏基) has submitted its application, while Zijin Gold International (紫金黄金国际) passed the Hong Kong Exchange hearing with an estimated valuation of approximately $30 billion, potentially positioning it as the world’s second-largest IPO this year. The entire gold jewelry sector is experiencing unprecedented capital market enthusiasm.
Amid this industry-wide momentum, Putian-based gold watch manufacturer Xipuni has emerged as a notable contender. The company recently passed its Hong Kong Exchange hearing and finalized its IPO timeline, planning to list by month’s end. This development marks a significant milestone for a company that previously attempted listings on China’s New Third Board multiple times and pursued A-share and Beijing Stock Exchange listings without success.
Executive Summary: Critical Market Insights
– Xipuni holds 35.83% market share in China’s solid gold watch segment, generating RMB 457 million in 2024 revenue
– The company employs innovative gold leasing arrangements to hedge against price volatility, maintaining 27.2% gross margins
– Inventory management remains a concern with 708 days inventory turnover, significantly higher than industry peers
– Customer concentration risk persists with top five clients representing 87.26% of 2024 revenue
– Smartwatch expansion and international markets represent growth opportunities amid domestic challenges
The Putian Gold Dynasty Behind Xipuni
Xipuni’s controlling shareholder Li Yongzhong (李永忠) hails from Putian’s Beigao Town in Fujian Province, known as the “hometown of gold jewelry.” This region serves as both the birthplace of China’s gold jewelry industry and what many consider the “Whampoa Military Academy” of China’s gold sector. Growing up in this gold-rich environment, Li represents the second generation of goldsmiths transforming traditional craftsmanship into modern enterprises.
In 2003, Li brought his extensive industry experience from Putian to Shenzhen, where he established a jewelry company. Recognizing increasing market competition, he identified an opportunity in combining gold with timepieces. In 2013, Li partnered with his son-in-law Hu Shaohua (胡少华) to establish Zunshang Watches in Shenzhen, later rebranded as Xipuni.
The company truly became a family enterprise in 2015 when Li’s sons Li Shuo (李硕) and Li Linmao (李林茂) joined through capital increases. This established a control structure with the four family members collectively holding 61.60% ownership, embedding family-style management into the company’s DNA.
Cluster Advantages in Jewelry Manufacturing
Putian merchants possess remarkable cluster advantages in the jewelry industry that have significantly contributed to Xipuni’s rapid development. Industry data indicates that over 70% of China’s gold jewelry distributors have connections to Putian-based merchants. This extensive network and supply chain resources have enabled Xipuni to quickly establish market presence and distribution channels.
The company identified a market gap between homogenized traditional gold jewelry and prohibitively expensive high-end mechanical watches. Xipuni developed China’s first mass-produced solid gold watch, combining gold’s value preservation characteristics with practical timekeeping functionality. This innovative approach precisely targeted the consumption psychology of lower-tier markets seeking gold purchases as value preservation tools.
Business Strategy of China’s Gold Watch Leader
While traditional gold jewelry faces intense homogenization competition, Xipuni successfully merged solid gold materials with watch functionality to create “wearable gold assets.” This innovation perfectly captured the value preservation mentality of consumers in lower-tier markets, enabling the company to rapidly capture over one-third market share in China’s RMB 1.62 billion solid gold watch market.
The family governance structure represents another competitive advantage. The concentrated ownership structure with four family members controlling 61.60% enables rapid decision-making. Combined with the nationwide network of Putian-origin jewelry distributors, the company has established 3,000 sales points, with four primary distributors consistently contributing over 70% of revenue. This “acquaintance economy” model proved highly effective during the company’s development phase.
Dual-Track Business Model
Xipuni developed a dual-track strategy to balance risk and growth. The company maintains two proprietary brands—Xipuni and Golden Bear—that command premium pricing, while simultaneously conducting OEM manufacturing for established brands including Lao Feng Xiang (老凤祥) and Chow Tai Seng (周大生). In 2024, OEM business generated RMB 119 million in revenue, representing 26% of total revenue and providing crucial stable cash flow. This approach demonstrates the distinctive survival wisdom characteristic of Putian merchants.
The company’s gold leasing model represents textbook financial management amid gold price volatility. By leasing raw materials from banks and returning equivalent gold upon maturity, Xipuni successfully locks in costs during periods of surging gold prices. This hedging mechanism prevents cost失控 and has been instrumental in maintaining improving gross margins. Compared to industry peers who typically employ “follow-the-market” pricing methods, this model provides greater profit stability but requires substantial financial strength and banking relationships—areas where Putian business networks excel.
Product Innovation and Technological Integration
Xipuni has embraced smart technology trends by launching solid gold watches equipped with Huawei chipsets. This transformation from traditional gold watches’ “old-fashioned” image to “tech-light luxury” positions these products as affordable alternatives to Huawei’s smart gold watches. More importantly, this innovation breaks the single attribute of gold watches as mere “value preservation tools” and begins attracting consumers aged 30-45.
Although smart series products currently contribute only 6.1% of revenue, they effectively reshape brand image and provide new narratives for channel expansion. Continuous increases in R&D investment support this transformation, growing from RMB 8.45 million in 2022 to RMB 1.78 million in 2024. The company’s R&D expense ratio remains notable among traditional jewelry enterprises.
Financial Performance and Market Position
Xipuni has demonstrated impressive financial performance despite market challenges. Between 2022 and 2024, company revenue grew from RMB 324 million to RMB 457 million, while gross margins improved from 19.8% to 27.2%. This simultaneous growth in scale and profitability reflects effective management and strategic positioning within the luxury goods market.
According to China Insights Consultancy data, Xipuni captured 8.97% market share by sales volume to become China’s largest gold watch brand in 2023. More significantly, the company dominated the solid gold watch segment with 35.83% GMV share. This market leadership provides strong positioning as the company prepares for its public listing.
Channel Expansion Strategy
Xipuni’s channel expansion continues the Putian merchant “human sea tactics.” The company’s sales network extends from first-tier city shopping malls to county-level jewelry stores, with particularly strong penetration in third and fourth-tier cities that significantly exceeds industry peers. This布局 precisely aligns with the “下沉化” (sinking market) trend in gold consumption, where demand growth increasingly comes from smaller cities and rural areas.
The company’s distribution strategy leverages the extensive Putian merchant network to establish presence across diverse market segments. This approach has proven particularly effective in reaching consumers who value both the practical functionality of watches and the investment characteristics of gold products.
Challenges and Risk Factors
Despite strong market positioning, Xipuni faces significant challenges that potential investors must carefully consider. The company’s inventory management represents a particular concern, with 2024 year-end inventory reaching RMB 656 million and inventory turnover days extending to 708 days. This意味着 existing inventory requires nearly two years for complete digestion, compared to industry peers like Chow Tai Fook (周大福) and Lao Feng Xiang (老凤祥) who typically maintain inventory turnover between 200-300 days.
Extreme customer concentration constitutes another substantial risk. During the 2022-2024 fiscal years, sales to the company’s top five customers accounted for 91.34%, 91.08%, and 87.26% of total revenue respectively. This high concentration weakens bargaining power and creates vulnerability to revenue disruption should major clients transition to competitors. Particularly concerning, Xipuni began extending customer payment terms in 2023, indicating potentially weakening channel influence.
Product Strategy Concerns
As gold prices continue reaching record levels, Xipuni has implemented a “gold reduction, price maintenance” strategy. In 2024, the average gold weight per watch decreased 17.4% year-over-year from 5.48 grams to 4.32 grams, while prices remained unchanged at RMB 2,856 per piece. While this strategy improved gross margins, it potentially damages brand integrity and consumer trust as customers become increasingly sensitive to “gold content” during periods of high gold prices.
The company’s smartwatch initiatives, while promising, face technological challenges. Huawei, Apple, and other technology giants are reshaping market rules with rapid technological iterations that far exceed the development pace of traditional gold watches. Xipuni’s innovation remains at the “gold + smart” combination level, lacking core technological barriers. This limitation creates concerns about the sustainability of the 6.1% smart business revenue growth.
IPO Journey and Market Implications
Xipuni’s path to public listing has been remarkably challenging despite its position as China’s largest gold watch manufacturer. The company first attempted listing on China’s New Third Board in 2016 with aspirations toward A-share market entry. After delisting in 2019, Xipuni prepared for a Shenzhen Stock Exchange ChiNext Board IPO before returning to the New Third Board with a second listing in 2022.
The company delisted again in November 2024 to pivot toward Hong Kong markets. After its prospectus lapsed in June 2025, Xipuni submitted a second application to the Hong Kong Exchange, finally passing the hearing and securing a late September main board listing date. This曲折 journey reflects broader capital market reassessment of gold jewelry valuation methodologies.
Market Timing and Strategic Pivot
Xipuni’s transition from A-share aspirations to Hong Kong listing reflects broader industry trends. The spectacular 70% first-day surge of Lao Feng Xiang following its 2023 Hong Kong Exchange debut, combined with Meng Jinyuan’s successful 2024 Hong Kong listing, demonstrated the strong investor appetite for gold-related equities in Hong Kong markets. This reception likely influenced Xipuni’s strategic decision to abandon domestic listing plans in favor of international markets.
The company’s listing timing coincides with exceptional market conditions for gold-related investments. Global economic uncertainty, inflationary pressures, and geopolitical tensions have all contributed to sustained gold price strength, creating favorable conditions for companies positioned within the gold value chain.
Growth Strategies and Future Outlook
Xipuni is pursuing two primary growth initiatives to address its challenges and capitalize on emerging opportunities. The company’s smartwatch strategy involves integrating technology with traditional gold craftsmanship, exemplified by the Huawei chipset-equipped models launched in 2023. While smartwatch revenue reached RMB 28.025 million in 2024, the segment represents only 6.1% of total revenue with 18% gross margins—significantly below traditional gold watch operations.
International expansion represents the second strategic pillar. In 2024, Xipuni established cooperation with Malaysian distributors and received initial watch orders. The company plans to enter Middle Eastern markets, though success remains uncertain against established international brands like Rolex and Omega that have cultivated these markets for decades.
The Value Paradox of Smart Gold Watches
Xipuni’s core product innovation faces a fundamental value contradiction. Smart products experience rapid iteration cycles and functional obsolescence that drive depreciation—characteristics of functional consumption. Conversely, solid gold carries speculative and collection attributes associated with value preservation. Reconciling these opposing characteristics presents a significant challenge for product development and marketing strategies.
The market ultimately expects this innovative gold watch manufacturer to address its high inventory burden, reduce customer dependency, and transform “gold watch” from a product category into a trusted brand symbol. Success in these areas will determine whether Xipuni can transcend the constraints facing traditional gold jewelry enterprises and establish sustainable competitive advantages.
Investment Considerations for Market Participants
For institutional investors and financial professionals evaluating Xipuni’s IPO, several key factors warrant careful consideration. The company’s unique market position as China’s dominant solid gold watch manufacturer provides defensive characteristics during market downturns, as gold-related investments typically maintain value better than pure consumer discretionary names.
However, the inventory management issues and customer concentration risks require thorough due diligence. Investors should scrutinize the company’s plans to address these operational challenges and assess whether the proposed solutions appear adequate for the scale of the problems. The inventory turnover ratio of 708 days particularly demands explanation and remediation plans.
Sector Analysis and Comparable Valuation
Xipuni operates at the intersection of luxury goods, jewelry, and specialized consumer products. Valuation metrics should consider companies across these segments rather than pure-play jewelry manufacturers. The company’s profit margins exceeding 27% compare favorably with many traditional jewelry businesses but may face pressure as the market becomes more competitive.
Investors should monitor gold price trends and their impact on consumer behavior. While rising gold prices theoretically increase the value of inventory, they may also suppress demand as consumers perceive gold products as increasingly expensive. Xipuni’s ability to navigate this delicate balance will significantly influence post-IPO performance.
Strategic Implications for the Gold Industry
Xipuni’s upcoming IPO reflects broader transformations within China’s gold industry. Traditional jewelry manufacturers face multiple challenges including market saturation, gold price volatility, inventory management inefficiencies, and weakening channel control. Companies are increasingly pursuing diversification strategies such as product innovation, technological integration, and international expansion.
The success or failure of Xipuni’s public listing will provide valuable insights into market reception for innovative gold product manufacturers. A successful debut could encourage similar companies to pursue public listings, while disappointing performance might temper investor enthusiasm for the sector.
Industry participants should monitor how Xipuni allocates IPO proceeds between debt reduction, inventory management, research development, and market expansion. These allocation decisions will reveal management’s prioritization of various challenges and opportunities facing the business.
Final Assessment and Market Outlook
Xipuni represents a fascinating case study in traditional industry innovation and capital market access. The company has demonstrated remarkable resilience through multiple listing attempts and has identified a compelling market niche combining gold’s investment characteristics with practical utility. However, significant operational challenges remain unresolved.
Market participants should approach this IPO with cautious optimism, recognizing both the company’s strengths in product innovation and market positioning, and its weaknesses in inventory management and customer concentration. The upcoming listing will test investor appetite for companies operating at the intersection of traditional luxury goods and modern consumer technology.
Financial professionals tracking Chinese equity markets should monitor Xipuni’s post-listing performance as an indicator of market sentiment toward innovative consumer brands with traditional manufacturing roots. The company’s journey may provide valuable insights for similar enterprises considering public market entry.
For comprehensive investment analysis, consult recent HKEX filings and industry reports from leading financial institutions specializing in consumer goods and luxury sectors. Consider both the unique opportunities presented by gold price trends and the structural challenges facing specialized manufacturers in evolving markets.
