China Consumer - Jewelry: A K-shaped June and 2026 Amid Gold Price Pull Back

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China Consumer - Jewelry: A K-shaped June and 2026 Amid Gold Price Pull Back

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15 Jul 2026 06:26:53 ET │ 12 pages

China Consumer - Jewelry

A K-shaped June and 2Q26 Amid Gold Price Pull Back

CITI'S TAKE

China jewelry retail sales decline narrowed to 3.4% yoy in Jun 26 vs.

21.3%/8.9% in Apr/May per NBS data. Given a deeper gold price decline in

June at -11% mom vs. Apr/May’s -3%/-3%, the better June reflected a

pent-up demand of weight-based gold jewelry products (which Tiffany FengAC

contributed most industry sales) while fixed-price gold jewelry products +852-2501-2759

still struggled, in Citi’s view. Among Citi’s gold jewelry coverage, we expect tiffany.feng@citi.com

downside to our Laopu Jun preview in 1H26E results, while Chow Tai Fook

Xiaopo Wei, CFA and Luk Fook to maintain solid operation in their 1QFY27E updates. Our

pecking order in the China jewelry space is Chow Tai Fook > Laopu > Luk +852-2501-2472

xiaopo.wei@citi.com Fook.

Brian Cho

+852-2501-2712Implication on Laopu – Given Laopu’s products have fixed prices, the deeper gold

brian.cho@citi.com

price decline in Jun further expanded its product price premium over traditional

weighted-based gold jewelry products to 74% (figure 1 & 2). Therefore, we expect

downside to our earlier 1H26E preview where we estimated revenue to grow 77% yoy

to Rmb21.9bn (Rmb17.5bn in 1Q and Rmb4.4bn in 2Q), and NP to surge 114% to

Rmb4.85bn (Rmb3.8bn in 1Q and Rmb1.05bn in 2Q). That said, we also think 2Q

sales/earnings are bottomed and the stock is oversold amid recent gold price retreat

with compelling valuation at 8.7x P/E and 8.6% dividend yield in 27E (normalized

earnings). See Citi’s Jun 22 note: Laopu Gold (6181.HK) - 2Q26E operation trend and

1H26E earnings preview.