Eliza Wong
Executive Summary
Key insights from Chow Tai Fook Jewellery Group’s (潮宏基) potential Hong Kong listing:
– The company aims to become China’s first dual-listed fashion jewelry company (A+H shares) with projected expansion into Southeast Asian markets
– Revenue reached CNY 6.518 billion in 2024 with net profit of CNY 194 million, maintaining leadership in China’s fashion jewelry segment
– Strategic shift from direct-operated stores to加盟 model (85% of 1,542 stores) driving 33% revenue growth in 2023
– IPO proceeds allocation: 40% for store expansion (300 new stores), 20% for R&D and supply chain upgrades
– Challenges include毛利率 compression (27% to 23.1%) and increased competition from traditional gold brands
The New Gold Rush: Gen Z Transforms China’s Jewelry Market
When Generation Z started buying gold, a trillion-yuan market began reshuffling. As young consumers drive trends in milk tea, cosmetics, trendy toys, and snacks to Hong Kong listings, jewelry sellers can no longer sit still. Investment Home Network learned that in September 2025, Chinese fashion jewelry giant Chow Tai Fook Jewellery Group (潮宏基) (002345.SZ) formally submitted its Hong Kong listing application, initiating its second listing process.
This意味着, after listing on the Shenzhen Stock Exchange in 2010, this jewelry company with a market capitalization exceeding CNY 10 billion will开启 the era of dual capital platforms. If successfully listed, Hong Kong will welcome the veritable first stock of fashion jewelry.
Once, gold jewelry could be said to be the elders’ heirloom treasure, carrying the mission of family wealth and years of stability, more like a wealth symbol for保值增值. Now, it has transformed into a magic wand in young people’s hands, used to display identity, personality, and establish their own fashion persona—buying not just metal, but emotional寄托 and social currency.
Market Transformation Drivers
The diverse product forms and innovations of gold brands恰到好处地迎合 this consumption trend. Designs are not only lightweight but also incorporate many cultural collaborations, greatly meeting young people’s personalized fashion needs. Numerous brands showcase their capabilities, such as Chow Tai Fook’s collaboration with Black Myth, while Chow Tai Fook Jewellery Group is undoubtedly one of the most dazzling trendsetters.
Many might not know that Chow Tai Fook Jewellery Group has been deeply involved in the gold jewelry industry for thirty years. Like the common industry scenario of father-son teams, Chow Tai Fook Jewellery Group also features a father-son partnership with inheritance, jointly building a large commercial empire spanning gold jewelry and fashion industries.
From Humble Beginnings to Market Leadership
Founder Liao Muzhi (廖木枝) and his son Liao Chuangbin (廖创宾) hail from Chaoyang, Shantou. At that time, the local gold processing atmosphere was strong, and the father-son duo initially earned meager income from gold recycling and processing. Later, as Hong Kong and Taiwan-funded gold processing factories entered Guangdong, local processing workshops gradually lost competitiveness. Liao Muzhi contracted workshops and improved technology to cope with competition.
Son Liao Chuangbin left school early to take over the family business, establishing Chow Tai Fook Jewellery Group in 1996, becoming one of China’s earliest jewelry brands. Early on, this brand featured youth fashion as its characteristic, with rich product combinations—over 85% of target consumers were post-80s to post-00s. The father-son duo was quite forward-thinking, adopting the latest craftsmanship, leading the industry with new designs, and setting up brand counters in Northeast China and Jiangsu-Zhejiang regions.
Building a Fashion Jewelry Empire
Initially, the self-operated model resulted in insufficient store numbers. It wasn’t until 2018, with the help of加盟商, that they rapidly expanded stores and gradually caught up with peers. Not just focusing on jewelry, this father-son pair also crossed boundaries to acquire women’s bag and beauty brands, indicating broad involvement.
In 2024, Chow Tai Fook Jewellery Group’s revenue reached CNY 6.518 billion, with net profit attributable to shareholders of CNY 194 million, maintaining the top position in China’s fashion jewelry market share for many consecutive years. In recent years, Chow Tai Fook Jewellery Group has consistently pursued product design, seized IP collaborations, and narrowed the distance with young consumers. In this new trend, it hasn’t fallen behind and has even opened the door to a Hong Kong IPO. If successful, this father-son duo will create a new wave of wealth神话.
The K-Gold King’s Competitive Strategy
In the jewelry industry, Chow Tai Fook Jewellery Group was once that special child. This uniqueness stems from its breakthrough via the K-gold track. Through extreme dedication to K-gold, its market share exceeded 25% at the time of its 2010 Shenzhen listing—three times that of the second place—directly securing the throne as the K-gold king.
Behind this lies its疯狂挖掘 of K-gold’s malleability: mixing other metals into gold increases hardness, immediately opening up design space. While peers were still selling traditional designs like zodiac signs and awakening lions, Chow Tai Fook Jewellery Group directly introduced brainwave styles like crabs, koi fish, and abacus beads.
Design Innovation and Cultural Integration
The vast design space unleashes unlimited imagination for the brand’s product lines. Imagine young women’s eyes lighting up when browsing stores—who wouldn’t want to wear a wealth-attracting koi as a talisman? To support these designs, Chow Tai Fook Jewellery Group invested heavily in building a design team, with R&D expenses far exceeding industry averages.
With 3D/5D hard gold craftsmanship, K-gold jewelry not only features more exquisite shapes but also solves old problems like fading and deformation. The number of patents holds a断层领先 position in the K-gold circle. Even more impressive, it revitalized old traditions—while others found filigree inlay troublesome and expensive, it specifically established studios to inherit this craft, blending filigree with minimalist designs, and even collaborating with Doraemon and Pikachu for IP editions, making young people who thought gold was tacky rush to buy.
Challenges and Strategic Pivots
But success with K-gold also brought constraints. From 2013-2019, the gold market suddenly exploded, with consumption soaring from less than 1000 tons to 1500 tons. Chow Tai Fook and Lao Feng Xiang expanded rapidly through加盟 and promotions, with revenues surging. However, Chow Tai Fook Jewellery Group, too focused on K-gold, didn’t adjust timely, with revenues stuck between CNY 5-7 billion, widening the gap with leading brands.
The main business didn’t keep up, but the founders ventured into investments and acquisitions. In 2014, the company spent CNY 1.378 billion to acquire women’s bag brand FION (菲安妮), attempting diversification. However, due to industry differences and insufficient operational experience, performance directly slumped. From 2018-2022, it recorded CNY 441 million in goodwill impairment, with CNY 725 million in goodwill still hanging, pressuring both stock price and performance.
Operational Restructuring
Conservative channel strategies further dragged progress. While other brands疯狂开店 through加盟, it preferred self-operated counters and lavish装修. The brand was established, but money burned quickly, and channel expansion was slow as a snail. As of end-June 2025, Chow Tai Fook Jewellery Group had 1,542 stores, while Chow Tai Fook had 7,000 and Lao Feng Xiang over 5,000. The founders later reflected: too focused on products, forgetting scale and channels also matter!
Since 2018, Chow Tai Fook Jewellery Group began adjustments: closing some self-operated stores, leveraging加盟商 for accelerated expansion. In 2023, it净开 246 new stores, with加盟店 accounting for 85%. Plans include opening 300 more stores annually over the next two years, focusing on second and third-tier cities.
Future Outlook and IPO Implications
This move indeed worked: revenue in the first three quarters of 2023 increased 33% year-on-year, with full-year expectations exceeding CNY 5.8 billion. Jewelry business accounts for over 90%, firmly placing it in the CNY 5 billion club. However, expansion comes at a cost—gross margin dropped from 27% to 23.1% because加盟 channels have lower margins; expansion and profitability sometimes cannot be兼得.
Business-wise, Liao Chuangbin focused on jewelry + leather goods, selling shares of Si Yan Li, rejuvenating FION women’s bags. In the first half of 2023, women’s bag revenue was CNY 200 million, up 10% year-on-year. Using Southeast Asian markets as the first step in overseas布局, Chow Tai Fook Jewellery Group has opened stores in Malaysia, Thailand, and Cambodia, with overseas store operations performing well.
Innovation and Market Positioning
The main jewelry track dares to experiment: in 2022, it invested CNY 11 million in a joint venture with lab-grown diamond company Power Diamond, betting on the cultivated diamond trend. Although the market is still in its infancy, this willingness to trial errors aligns with Chow Tai Fook Jewellery Group’s consistent innovation基因.
This transformation story tells us: in fast-changing markets, focusing on core advantages is the foundation, but flexibly responding to trends and balancing products with scale is the长久之道. After all, the jewelry industry has always been about survival of the fittest.
But真正破局 requires capital. Chow Tai Fook Jewellery Group looks to Hong Kong listing with clear goals: 40% of raised funds will用于 store expansion, adding 300 new stores within three years, half in second and third-tier cities; 20% funding投入 R&D and supply chain upgrades, focusing on突破 K-gold production technology—after all, design + technology is its core moat.
Strategic Vision and Global Ambitions
Deeper intention is国际化: Hong Kong listing can enhance international visibility, starting with Southeast Asian Chinese markets, accumulating overseas experience, eventually冲向 global markets. There’s also governance structure optimization—Hong Kong has strict requirements for listed companies, forcing Chow Tai Fook Jewellery Group to improve management, increase transparency, introduce international investors to improve shareholder structure, laying the foundation for long-term development.
However, opportunities and challenges are always twins. The rise of national trends made Chow Tai Fook Jewellery Group’s Filigree Candy series sales double in 2024, becoming a hit. But traditional gold brands are also snatching K-gold market share—Chow Tai Fook’s SOINLOVE and Lao Feng Xiang’s EMPHASIS are dividing the market.
Market Dynamics and Consumer Shifts
Consumer preferences are also changing—ancient method gold became popular, gold prices rose, more people treat gold as investment products, weakening K-gold’s decorative attributes. Digital transformation is another hurdle—jewelry is high-ticket items, difficult for online conversion. Chow Tai Fook Jewellery Group’s online channel proportion is still below industry average, forcing it to accelerate online-offline integration.
In the future, Chow Tai Fook Jewellery Group must balance maintaining K-gold and expanding黄金, synchronize offline expansion with online transformation, and deepen domestic cultivation while exploring overseas. Hong Kong listing is not the终点 but the starting point of二次创业. After all, in the jewelry industry, where competition is fierce, only continuous evolution avoids elimination.
Investment Considerations and Market Positioning
The success of Chow Tai Fook Jewellery Group’s Hong Kong IPO will depend on multiple factors: sustained consumer demand for innovative jewelry designs, effective execution of expansion plans, and ability to navigate competitive pressures. International investors should monitor several key metrics including same-store sales growth, margin trends, and market share developments in both K-gold and traditional gold segments.
The company’s unique positioning as a fashion-forward jewelry brand catering to younger demographics provides differentiation in a crowded market. However, execution risk remains significant given the ambitious expansion targets and need to maintain design innovation while scaling operations.
Risk Assessment
Key risks include: gold price volatility affecting consumer demand, intensified competition from both traditional jewelry brands and new entrants, execution challenges in rapid store expansion, and potential dilution from the IPO. The company’s historical reliance on K-gold also presents concentration risk if consumer preferences shift toward traditional gold products.
Investors should also consider the company’s debt levels post-IPO and its ability to generate sufficient cash flow to fund expansion while maintaining profitability. The success of overseas expansion, particularly in Southeast Asia, will be crucial for long-term growth prospects.
Final Analysis: Weighing the IPO Opportunity
Chow Tai Fook Jewellery Group represents a unique investment proposition in China’s jewelry sector—a company that has successfully reinvented traditional gold jewelry for contemporary consumers while maintaining growth momentum. The Hong Kong IPO offers access to international capital and potential valuation re-rating compared to its A-share listing.
The company’s focus on product innovation, brand building, and strategic expansion positions it well to capture growth in China’s evolving jewelry market. However, investors must carefully assess whether the growth trajectory justifies the valuation expectations and whether management can successfully execute the ambitious expansion plans while maintaining profitability.
For sophisticated investors interested in China’s consumer sector, Chow Tai Fook Jewellery Group offers exposure to the premiumization trend and evolving consumer preferences. The dual-listing structure provides additional liquidity and potential arbitrage opportunities between the A-share and H-share markets.
As with any investment in the competitive retail sector, thorough due diligence on management execution capabilities, market positioning, and competitive dynamics is essential. The company’s ability to balance innovation with operational excellence will ultimately determine its success in capturing the opportunities presented by China’s evolving jewelry market.
