Senior commodities analyst Henry Hu says gold-jewellery stocks historically
tracked gold prices and were treated as adjuncts to miners, but the dynamic has
shifted. Since 2025 investment gold bars have exceeded 50% of the China market
and become dominant; self-purchase and wedding demand remain rigid but are
budget-anchored, so consumers tend to wait when gold is elevated. A H1 decline
in the gold price has not produced a clear rebound in jewellery sales.
Fixed-price SKUs suffer from delayed repricing and companies’ responses differ;
gram-weight products are more resilient. Chaohongji reported sequential
acceleration in Q2 and continued sell-through. Crucially, share prices have
materially disconnected from fundamentals: gold weakness affects firms unevenly,
yet the sector has fallen collectively and many names trade at very low PBs
(Chow Sang Sang ~0.4). Absent a further ~50% drop in gold, current valuations
look cheap.
