K
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Latest price: 62.3
Change: +5.66
Percentage change: +9.99%
Volume: 34,200 lots
Turnover: 212 million
Turnover rate: 1.08%
PE ratio: 12.44
Market capitalization: 32.6 billion
Check the stock market of this stock Real-time fund flow In-depth data revelation Enter Lao Feng Xiang Lao Feng Xiang fund flow
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K
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Latest price: 16.55
Change: +0.46
Percentage change: +2.86%
Volume: 86,900 lots
Turnover: 145 million
Turnover rate: 0.80%
PE ratio: 12.26
Market capitalization: 18.1 billion
Check the stock market of this stock Real-time fund flow In-depth data revelation Enter Zhou Dasheng Zhou Dasheng fund flow
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“In fact, the profit margin of gold products in the jewelry industry is very low, and businesses also bear the price risk brought about by the fluctuation of gold prices. Looking at the booming market from another perspective, it is also a gambling market,” said Visa, the partner of a gold wholesale company and a member of the Shanghai Gold Exchange, couldn’t help but sigh to the reporter.
The fluctuation of gold prices affects investors’ nerves and poses a huge challenge to industry chain manufacturers. Interviewed manufacturers such as Lao Feng Xiang (600612.SH) stated that they would adjust terminal selling prices to offset the difference in gold prices; Zhou Dasheng (002867.SZ) stated that the company also has measures such as borrowing gold to offset risks.
Recently, gold prices have reversed the previous upward trend and entered a volatile phase. In mid-September, domestic gold prices exceeded RMB 470/gram, and the price of gold jewelry exceeded RMB 600/gram. International gold prices also broke through $1,940/ounce, attracting countless consumers and investors chasing high prices. However, since September 25th, international gold prices have experienced a “nine consecutive declines,” hitting a nearly 7-month low. Domestic gold prices have also continued to fall, falling to RMB 446/gram on October 6th, a drop of about 5% from mid-September. At the beginning of this week, the market reversed again, possibly influenced by the international situation, and the gold price rose rapidly. As of the 14th, the domestic gold price had risen to RMB 463/gram, and the international gold price also rose by more than 5% this week, experiencing the largest weekly increase in nearly seven months.
The rapidly fluctuating market first affects the terminal consumer market. “The short-term volatility of gold prices may have a slight inhibitory effect on terminal demand, causing more consumers to adopt a wait-and-see approach,” said a person from the securities department of Zhou Dasheng. Visa also told reporters that the recent gold shipments of his company are significantly lower than those in July and August, when gold prices were stable during the traditional gold sales off-season.
The sales end is affected, coupled with the difference brought 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-averse mentality of consumers and investors worldwide. The rapidly rising and falling gold prices are a severe test for manufacturers, indicating an increase in the uncertainty of obtaining profits for manufacturers and causing significant hesitation and panic among consumers, which is not conducive to market stability and will also affect the sales of gold products,” said Zhang Yi, chief analyst at Analysys.
Reporters visiting the gold and jewelry counters of many shopping malls learned that as of October 13th, the prices of well-known brands such as Chow Tai Fook (01929.HK) and Luk Fook had been adjusted downwards compared to the “Golden Week” holiday period, with jewelry prices ranging from 587 to 588 yuan per gram. A staff member at a Zhou Shengsheng (00116.HK) counter said that the price of gold has been relatively stable after the holiday, with overall price fluctuations of a few yuan. On the same day, the investment gold of these brands displayed prices ranging from 526 yuan/gram to 536 yuan/gram, with a decrease of more than 10 yuan per gram compared to before. The enthusiasm of young consumers to purchase 1 gram “gold beans” has not diminished.
From the perspective of the interviewed manufacturers, the fluctuation of gold prices mainly affects the consumption of investment gold. Most of the leading companies will take measures to hedge their losses.
“Regarding the consumption of gold, it mainly comes from two sources: investment and consumption. In our company, these two are actually integrated together. The demand mainly comes from holidays, such as before the National Day holiday, when many people get married. They definitely need to purchase (gold jewelry). This type of consumption is not affected much by the fluctuation in gold prices. If it is purely for investment, it will be more affected by the volatility,” said a person from the securities department of Zhou Dasheng. The company adopts a franchise and wholesale model and does not need to store a large amount of gold raw materials. The inventory is relatively stable. At the same time, the company also takes measures to hedge risks, such as borrowing gold from banks to repay gold.
A person from the securities department of Lao Feng Xiang said that wholesale income accounts for the majority, and for example, it was completely sold out in mid-September, so the impact is not significant. Retail prices are adjusted based on the specific gold price situation. In addition, the company has measures to hedge gold price fluctuations.
In this case, small gold retailers bear more risks. According to Visa’s analysis, if you consider the cost of funds, the profit of C-end retailers is not high, and there are also costs of venue and labor. Now, the C-end relies on quick turnover, and during the upward phase of gold prices, there are also value-added subsidies for inventory. If the price quickly corrects, the C-end will suffer. “However, when the market price drops, the market retail prices will also increase.