CHOW TAI SENG raises the brand usage fee for some gold products

The retail stocks of gold jewelry listed in Hong Kong performed well today (15th), with Lao Pu Gold (06181.HK) rising 6.5% to close at HKD 671, Chow Tai Fook (01929.HK) up 1.9%, and Chow Sang Sang (00116.HK) increasing 1.4%, while Chow Sang Sang (06168.HK) fell 1.5%.

According to a report by The Paper, on the evening of April 14th, Chow Tai Seng (002867.SZ) announced an adjustment to the brand usage fees for some products. The announcement stated that the brand usage fee for gold products priced by gram under the main brand and classic franchise channels of Chow Tai Seng would be uniformly adjusted from RMB 12 (the same below)/gram to RMB 24/gram, while the fee standard for gold products priced by piece would remain unchanged, effective from today based on the aforementioned standards. Chow Tai Seng (002867.SZ) latest reported at RMB 13.01, up 5.2%.

The announcement indicated that the reason for the adjustment was to comprehensively promote retail transformation, product upgrades, and deeply empower franchise operations, enhancing the company's overall brand competitiveness, in conjunction with the current development trend of the gold jewelry consumption market, the company's strategic resource investment, and the long-term development plan of the brand. The announcement also noted that the impact of this adjustment on the company's future performance is uncertain.

According to Chow Tai Seng's 2025 semi-annual report, the brand usage fee refers to the fee charged to franchisees or other authorized parties for purchasing goods from the company's designated suppliers, where the goods are sold under the "Chow Tai Seng" brand after passing quality inspection. In the first half of 2025, the average number of franchise stores was 4,497, with an average brand usage fee income of RMB 82,000 per store, an annual increase of 9.6%.

According to the analysis, the revenue share from franchise operations for Chow Tai Seng in the first three quarters of last year dropped from over 70% in the same period last year to nearly 50%, with franchise operations achieving revenue of RMB 3.345 billion, a year-on-year decrease of 56.34%. Among this, the wholesale sales revenue of inlaid products was RMB 336 million, a year-on-year decrease of 15.79%; the wholesale sales revenue of gold products was RMB 2.311 billion, a year-on-year decrease of 64.58%. The financial report also pointed out that self-operated and e-commerce businesses performed better than the overall performance, becoming a growth highlight