Data and Trends

　　■WIND data shows that the average monthly retail sales of gold, silver and jewelry in 2017-2019 was 163.348 billion yuan, while the monthly average in 2020-2022 was 158.601 billion yuan, a decrease of 4.747 billion yuan.

　　■According to DuPont analysis, in the past three years, the average ROE (return on net assets) of listed companies in the gold and jewelry industry was -37.95%, and the average net profit rate was -35.32%.

　　■Soochow Securities pointed out that the gold and jewelry industry will be affected by the epidemic in 2022. Some brand franchisees will slow down their store opening progress, delay decoration, and some stores that have opened will be closed and called back.

　　People in the industry believe that the decrease in store traffic, the rising cost of online traffic, and the lack of significant increase in conversion rate mean that the jewelry industry is facing traffic difficulties and cannot effectively find breakthroughs in the industry, so it began to try to seek new development opportunities across borders.

　　Recently, Chow Sang Sang (00116.HK) indicated that it intends to acquire three real estate properties, while Mingpai Jewelry (002574.SZ) expressed its interest in the photovoltaic industry.

The Red Star Capital Bureau has noticed that in the past two years, gold and jewelry companies have sought to cross-border. Last year, Mingpai Jewelry also increased its real estate brokerage business, and some companies made glasses and digital assets...

　　Why have gold and jewelry companies crossed borders in the past two years?

Wang Guoping, a senior retail expert, believes that the jewelry industry is facing traffic difficulties and cannot effectively find a breakthrough gap in the industry, so it began to try to seek new development opportunities across borders.

　　/ Jewelers Crossover /

　　Buy real estate, build photovoltaics, sell glasses

　　After the Spring Festival, Chow Sang Sang disclosed a related transaction: it planned to acquire a property in Yuen Long, Hong Kong for 116 million Hong Kong dollars, and at the same time planned to purchase two properties in Li Village, Lunjiao Street, Shunde District, Foshan, with a total consideration of RMB 7.175 million. , RMB 2.954 million.

　　As for the reasons for buying real estate, Chow Sang Sang said that in view of the current property market conditions in Hong Kong, the acquisition of Hong Kong properties is indeed a good investment opportunity. At the same time, it can protect the current operation of the group and is more cost-effective in the long run.

The acquisition of the two properties in Foshan is for the Group's own operation and long-term investment, which is in line with the overall interests of the Group.

　　In the past two years, there have been quite a few gold and jewelry companies that bought real estate for investment like Chow Sang Sang.

Chow Tai Fook (01929.HK) and the Zheng family have made frequent moves and set foot in the field of long-term rental apartments in 2020.

In 2020, Tongpai Hotel, a trendy hotel brand under Chow Tai Fook, officially opened in Pudong, Shanghai, with a total of 123 hotel rooms and long-term rental apartments, integrating the co-working and co-living models.

　　In 2022, Mingpai Jewelry announced that the company will use its own funds to invest in the establishment of a wholly-owned subsidiary Shanghai Zhijingduo, and plans to develop real estate sales brokerage business.

Mingpai Jewelry stated that the investment is "to promote the company's overall development strategy, further extend the company's industrial chain, better optimize the company's resource allocation, enhance the company's core competitiveness, and provide guarantee for the company's sustainable development."

　　It is worth noting that Mingpai Jewelry has explored in the real estate market before, but the effect was not good.

In 2015, Mingpai Jewelry spent 700 million yuan to acquire a 25% stake in Suzhou Haowu, but the performance of Suzhou Haowu in 2016-2018 was far from the promise at the time of the acquisition.

In 2022, Mingpai Jewelry will increase its real estate again, which shows its determination to cross borders.

　　As for the reasons why gold and jewelry companies invest in real estate, Wang Guoping, a senior retail expert, believes that one situation is that enterprises can buy self-sustained shops when the prices are low, and calculate the return rate of shops through rent to see if it is worth buying; another situation It means that enterprises can acquire land for construction at a low price and obtain income.

　　Red Star Capital Bureau found that in addition to real estate, jewelry companies are also crossing borders in other fields.

　　Mingpai Jewelry not only has its feet on the real estate market, but also the photovoltaic industry.

On February 4, Mingpai Jewelry announced that it plans to invest in the construction of a "super factory" project for solar and moon photovoltaic cells in the management area of ​​the Keqiao Economic Development Zone Management Committee.

The total planned investment of the project is about 10 billion yuan, and the total land area is about 380 mu, of which the investment in fixed assets of the project is 6.5 billion yuan.

　　Laofengxiang (600612.SH) announced in November 2022 to enter the professional glasses market across borders.

In fact, Laofengxiang established a holding subsidiary "Shanghai Laofengxiang Glasses Co., Ltd." in 2012 and started glasses-related business, but it emphasized entering the professional glasses market last year.

　　Lao Fengxiang told the Red Star Capital Bureau on February 9 that glasses are a new category under Lao Fengxiang, which has developed rapidly in recent years. When the business started, glasses were sold in Lao Fengxiang’s retail system. In-depth cooperation with sales channels.

　/ traffic dilemma /

　　Reduced store traffic and rising online costs

　　Gold and jewelry companies, why do they love cross-border investment so much?

　　"The jewelry industry is facing traffic difficulties, unable to effectively find a breakthrough gap in the industry, so it began to try to cross borders." Senior retail expert Wang Guoping told Red Star Capital Bureau, "The decrease in store traffic is a common situation faced by the physical industry. The cost of traffic keeps rising, and the conversion rate has not increased significantly.”

　　According to WIND data, the average monthly retail sales of gold, silver and jewelry from 2017 to 2019 was 163.348 billion yuan, while the monthly average from 2020 to 2022 was 158.601 billion yuan, a decrease of 4.747 billion yuan.

　　According to DuPont's analysis, in the past three years, the average ROE (return on equity) of listed companies in the gold and jewelry industry was -37.95%, and the average net profit rate was -35.32%.

　　Specifically, in terms of corporate performance, Mingpai Jewelry, which has a large cross-border range, will have negative non-net profits from 2019 to 2021, which are -98.99 million yuan, -310.2 million yuan, and -26.77 million yuan, respectively.

　　Chow Sang Sang's 2020 and 2021 continuing operations' net profit attributable to the parent company has also shrunk significantly compared to 2017-2019.

The 2022 mid-term report shows that its net profit attributable to the parent in the first half of the year fell by 12% year-on-year.

　　Soochow Securities pointed out that the gold and jewelry industry will be affected by the epidemic in 2022. Some brand franchisees will slow down their store opening progress, delay decoration, and some stores that have opened will be closed and called back.

　　/ The road ahead is long /

　　Performance decline, regulatory letter received...

　　Wang Guoping believes that some gold and jewelry companies cross-border, some are looking for new development opportunities, and some want to cater to the hype of the capital market. Each has different purposes and the results obtained are also different.

　　Red Star Capital Bureau noticed that it is not easy for the gold and jewelry industry to find a way out across borders.

　　Mingpai Jewelry’s cross-border real estate, Suzhou Haowu’s performance is not as good as promised, and its performance will further decline in 2020 and 2021, with losses of 85 million yuan and 319 million yuan respectively.

　　This year, Mingpai Jewelry announced its cross-border photovoltaic industry. As soon as the announcement came out, it received a regulatory letter, saying that there was a huge difference between its monetary fund balance, the balance of cash and cash equivalents at the end of the period, and the planned investment amount, and asked it to explain whether the above investment was feasible. Have a clear and viable source of funding.

　　However, the "Tongpai Hotel" that Chow Tai Fook set foot in long-term rental apartments in 2020 seems to be dumb, and there are no relevant words in the 2022 fiscal year report and the 2022/2023 interim report.

　　"Professional players in the original industry need to get rid of the system and be able to do things with more professional gameplay." Wang Guoping said that for cross-border success, it is very important to find people, and in addition to sufficient capital reserves, the probability of success can be enlarged.

　　Chengdu Commercial Daily-Red Star News reporter Yu Yao and Zhang Luxi