High gold prices reshape the jewelry channel landscape; Chow Tai Seng reduces franchise expansion and advances self-operated stores.

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Gold prices remain at a high level, accelerating the reshaping of the jewelry industry's channel landscape and profit model.

In 2025, Chow Tai Seng achieved operating revenue of 8.815 billion yuan, a year-on-year decrease of 36.54%. This marked the company's second consecutive year of declining revenue. However, net profit attributable to shareholders recorded 1.103 billion yuan, a year-on-year increase of 9.22%, indicating stronger profitability.

Entering the first quarter of 2026, this trend became even more pronounced: quarterly revenue was 1.954 billion yuan, down 26.9% year-on-year; yet net profit attributable to shareholders grew against the trend by 16.38% to 293 million yuan.

The main reasons for revenue decline are clear.

High gold prices have dampened terminal consumption, with downstream franchisees' willingness to restock dropping to rock bottom, and a general strategy of destocking being adopted.

In 2025, Chow Tai Seng's franchise business income plummeted 57.62% year-on-year to 3.894 billion yuan, with its proportion of total revenue shrinking from 66.13% in the previous year to 44.17%.

However, the contraction of franchise channels instead optimized the overall gross margin structure. As self-operated and e-commerce businesses face end consumers directly, their gross margins are significantly higher than the high-volume franchise wholesale model. The shift in channel focus has naturally raised profitability quality.

By Q1 2026, Chow Tai Seng's self-operated offline revenue surged 39% year-on-year, and e-commerce revenue rose 32.01%, with these two channels accounting for nearly 74% of total revenue.

The expansion of self-operated channels is not passive, but the result of proactive planning. By the end of Q1 2026, the number of self-operated stores had net increased to 390, with continuous expansion of sub-brands such as "Chow Tai Seng × National Treasure" and "Chow Tai Seng Classic" in core business districts.

In the first quarter, Chow Tai Seng's self-operated channel gross margin reached 39.29%, up 6.87 percentage points year-on-year.

The deepening of the brand matrix has become a key weapon against cyclical fluctuations.

In 2025, the company completed a comprehensive upgrade of the "Chow Tai Seng × National Treasure" brand, positioning it as "National Treasure Culture Exquisite Gold Pieces", focusing on the high-end cultural gold market, targeting high net-worth customers with low sensitivity to gold prices.

Additionally, "Chow Tai Seng Classic" focuses on the intangible heritage fashion segment, "Zhuanzhu Pavilion" explores Chinese style cultural creative bead jewelry, with multiple brands collaboratively covering the mass wedding, fashion consumption, and high-end collectible markets.

Looking ahead to 2026, the company identifies it as a crucial year for the full launch of its "strategic offensive," with clear focus on three core themes: brand matrix, AI-powered digital intelligence, and globalization. The globalization strategy has moved from initial exploration into systematic advancement.

The company is focusing on key overseas markets with high recognition of Chinese culture, actively promoting the layout of the first batch of flagship stores, and exploring a dual-track operation model of cross-border e-commerce and offline experience stores.

Following the path of "shrinking franchise, advancing self-operation," Chow Tai Seng is gradually evolving from a wholesale-oriented asset-light model to a retail model with heavier operations and stronger brand-driven forces.

In this transformation process, short-term profit improvement and long-term growth logic do not fully align.

If gold prices remain high, uncertainty will persist in the recovery of industry demand; if gold prices fall in the future, whether the channel structure and product matrix can accommodate a new round of demand release will become a key variable.

The true inflection point for growth still awaits a new balance to be found between demand recovery and capability realization.

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