Lao Fengxiang claims that the gold profit is almost zero

On May 20th, the international gold price dropped again by 11.3%. The gold price was 1348.3%, US$/oz. Chinese gold sources said that the price of gold will be adjusted back.

The price of gold continues to "fall." Since the wave of a slight rebound in the market in early May, the international gold price has recently returned to a decline. On May 20th, the international price of gold kept falling, as of 15:44 pm, a decrease of 11.3% and a price of 1348.3 US dollars per ounce.

Affected by this, some jewellery companies have also adjusted the retail gold price. For example, Lao Fengxiang [0.25% fund research report] on May 20, the gold price was 362 yuan/g, and on May 19 the price was 373 yuan/g. The price difference is around RMB 11; Chinese gold's basic gold price was RMB 273.5/g yesterday, and on May 17 it was RMB 281/g, and the gold prices of Chow Tai Fook and Caibai basically maintained the prices of the previous days, 350 respectively. RMB/g and 369 yuan/g.

Yesterday, the "Securities Daily" reporter contacted Mr. Wang Ensheng, Lao Fengxiang's chief spokesman. He told reporters: "At present, Lao Fengxiang's sales are very good, but the profits are almost gone.

Judging from the gold concept share price on May 20th, although China’s gold led the gains, the increase was only 2.02%. Dongfang Jinhao’s share price of 0.71% was reported to have risen by 1.98%. Chaochaiji’s [-0.34% fund] Research report] rose 1.7%, Lao Fengxiang rose 0.56%.

Gold jewelry business profits are almost zero According to Wang Ensheng, told reporters yesterday, the current decline in the price of gold, the domestic gold jewelry business sales are generally good, but unfortunately, at this stage the ills of the Chinese gold jewelry industry has emerged.

“There are a lot of jewellery companies that are very popular with the price war. Many companies are trying hard to reduce the cost of jewellery processing. For this idea, I can't say it wrong, but this is a bit of a cart before the horse. The value of jewelry is reflected in Its processing technology and services, and now some companies and consumers mistakenly believe that the purchase of gold jewelry is a direct purchase of gold, which also directly led to the impact of the industry as a whole, corporate profits are almost squeezed to zero.” Wang Ensheng told reporters .

"However, even if the profits are meager, these companies also carry out price wars. They only look at the market share," Wang Ensheng said.

“From the current situation of Lao Fengxiang, the gold price fluctuated quite a while ago when the company’s inventory processing was too late. Lao Fengxiang purchased a lot of raw materials at a high price when the previous round of price plunged, but now the price of raw materials has gone down. This also explains the characteristics of the gold jewelry industry restricted by raw materials," said Wang Ensheng.

According to the reporter’s understanding of China’s gold, the sales in the past two days were slightly worse than when the previous gold price plummeted. On the one hand, gold sales have entered the traditional off-season, on the other hand, they have just experienced a “grabbing of the golden tide”. It takes time to digest.

On May 19th, the gold price of China's gold base was 281 yuan/g to 283 yuan/g, down from 310 yuan/g earlier, but it has not fallen below the lowest 270 yuan/g recently. The Chinese gold personage said: "We think that the price of gold will be adjusted back.

According to reports, many investors have recently made a profit and China Gold has received seven or eight kilograms of investment gold bars for repurchase. “Customers purchased at a price of 260 yuan/g and sold for more than 280 yuan/g, which was a profit of 20 yuan/g. about.

According to Wang Ensheng, told reporters that the current decline in gold prices has not affected the performance of Lao Fengxiang. However, some analysts believe that if according to Wang Ensheng, the current profits of Lao Fengxiang are almost zero, which may affect the company's second quarter performance.

Lao Fengxiang's 2013 Gross Profit Margin is Expected to Improve According to the reporter's report from Lao Fengxiang's 2012 annual report and quarterly report this year, the company achieved operating income of 25.55 billion yuan in 2012, a year-on-year increase of 20.95%; net profit attributable to parent company was 611 million yuan, a year-on-year increase of 16.9%. . In the first quarter of 2013, the company achieved a net profit of 219 million yuan, a year-on-year increase of 26.56%.

In addition, in strengthening research and development, Lao Fengxiang said that a total of R&D expenses of 49.52 million yuan was spent last year, 46 new product developments were completed, and new product revenue accounted for 29.56% of the main business income. The company's brand value of Lao Fengxiang has reached 7.565 billion yuan, a net increase of 1.486 billion yuan over the same period of last year.

In the rapid expansion of the network, the company's marketing network reached 2,301, an increase of 14.2% year-on-year.

“The branding of the gold and jewelry industry needs a long period of precipitation, and once it is formed, it is a very strong competitive barrier. The company achieved nearly 20 billion yuan in gold jewelry sales, market share reached 11.3%, second only to Chow Tai Fook, brand value Climb," said the analyst.

At the same time, he also said: “The gold and jewelry industry is a typical heavy-asset, low-turnover industry, and under the expansion model of the franchise system, the inventory turnover rate of the company has consistently surpassed that of other competitors in the industry (2012 inventory turnover days were 79 days. ), on the one hand, reflects a strong brand influence, on the other hand also reduces the impact of gold price fluctuations.

Due to the relatively high sales of gold jewelry (about 70%), the overall gross profit margin of the company has been at a relatively low level (2012 gold jewelry gross margin was 9.5%). With gold quality and huge network resources, the company is able to implement zero-cost promotion of new products on the basis of existing channels. In the long run, optimizing the category structure and increasing the proportion of non-gold is its development direction. With the implementation of this strategy, the company's overall gross margin level will be significantly improved (the mosaic type gross margin is about 30%).