---
title: "Morgan Stanley: After confirming the increase in VAT costs, gold brand merchants will raise prices, expecting market consolidation"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/264121930.md"
description: "Morgan Stanley's report pointed out that after China canceled the value-added tax deduction on gold retail, gold brand merchants confirmed an additional 7% value-added tax would be imposed, resulting in a price increase of about 5% for gold jewelry. It is expected that the market will see consolidation, with small and medium-sized retailers facing a higher risk of store closures. LFX and CHOW TAI SENG are significantly impacted, followed by CHOW TAI FOOK, while old gold shops are in a relatively advantageous position"
datetime: "2025-11-04T01:50:55.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/264121930.md)
  - [en](https://longbridge.com/en/news/264121930.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/264121930.md)
---

# Morgan Stanley: After confirming the increase in VAT costs, gold brand merchants will raise prices, expecting market consolidation

China cancels the value-added tax deduction policy for gold retail. Morgan Stanley issued a report stating that gold brand merchants have confirmed with the authorities that an additional 7% value-added tax will be levied on gold raw material purchases. Many brands raised the prices of gold jewelry, priced by weight, by about 5% on November 3rd (yesterday). Demand elasticity is key to profitability. Mass market products are more susceptible to impact.

The bank noted a potential trend of demand shifting, including from gold bars to jewelry, from weight-based pricing to fixed pricing models, from small operators to leading brands, and from mainland China to Hong Kong and Macau. The market is expected to see consolidation, with small and medium-sized retailers facing more store closures. Brands with weak franchise management also face risks.

Morgan Stanley indicated that within its coverage, it believes LFX (600612.SH) and CHOW TAI SENG (002867.SZ) will be more significantly impacted, followed by CHOW TAI FOOK (01929.HK); Lau Po Gold (06181.HK) is in a relatively favorable position

### Related Stocks

- [002867.CN](https://longbridge.com/en/quote/002867.CN.md)
- [01929.HK](https://longbridge.com/en/quote/01929.HK.md)
- [600612.CN](https://longbridge.com/en/quote/600612.CN.md)

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