Since 2025, the gold market has been exceptionally volatile. From last November to the present, gold prices have surged from $4,000 per ounce to $5,100 per ounce. However, as gold prices climb higher, the share price of Zhou Liu Fu (06168.HK) has conversely trended lower.

Since the beginning of 2026, Zhou Liu Fu’s share price has fallen for three consecutive months. As of the close on March 13, 2026, Zhou Liu Fu was quoted at HK$21.28. The company's share price has plummeted nearly 60% from its peak of HK$52 in November last year.

Share Price Declines for 6 Consecutive Months, Trading Nearly 10% Below IPO Price

Public records show that Zhou Liu Fu was founded in 2004 and is headquartered in Shenzhen. It is an enterprise integrating jewelry product development and design, procurement and supply, franchising, and brand operations. Through a comprehensive retail store network and an online-to-offline (O2O) model, the company provides customers with a diverse portfolio of high-quality jewelry products, primarily including gold jewelry and diamond-set jewelry.

In June 2025, Zhou Liu Fu listed on the Hong Kong Stock Exchange with an IPO price of HK$24 per share. At the start of its listing, the rise in gold prices sparked capital enthusiasm for the gold jewelry industry, driving the company's share price above HK$50 per share at one point.

However, as gold prices continued to climb, Zhou Liu Fu’s share price began a continuous decline in November last year that has now lasted six months. As of the close on March 13, 2026, the share price stood at HK$21.28. Compared to the brief surge following its IPO, the overall performance has been lackluster. The company is now trading below its offer price, with its market capitalization shrinking to HK$9.376 billion—a wipeout of over HK$10 billion from its November peak of HK$23.154 billion.

Looking at the company's fundamental performance, in the first half of 2025, Zhou Liu Fu achieved revenue of RMB 3.15 billion (up 5.2% YoY) and a net profit of RMB 415 million (up 11.9% YoY). Amidst a macro environment of weak consumption and high gold prices, the company still managed to deliver a "double growth" report card.

Furthermore, regarding business structure, Zhou Liu Fu’s online channels surpassed offline channels for the first time, contributing RMB 1.632 billion in revenue—a sharp increase of 34% year-on-year—accounting for over 50% of total revenue. Zhou Liu Fu, which once relied heavily on a franchise model, has effectively shed its "traditional" label. Meanwhile, the same-store sales growth rate of its self-operated stores exceeded 30% in the first three quarters of 2025.

Slowdown in Growth Rates and Contraction of the Franchise Model

Despite the positive financial results, Zhou Liu Fu’s franchise model is in a state of contraction.

As of the end of 2024, the company had 4,129 stores nationwide covering 31 provinces, of which 4,038 were franchised stores (accounting for a high of 97.8%) and only 91 were self-operated. By store count, Zhou Liu Fu ranks fifth among Chinese jewelry brands, but it ranks only tenth in gold product revenue, with a market share of approximately 1%.

Data shows that by the first half of 2025, Zhou Liu Fu’s store count had dropped to 3,857, with franchise revenue declining 17% year-on-year and a net reduction of 272 stores. Specifically, Zhou Liu Fu reduced its franchised stores by 280 while adding 6 self-operated stores in the first half of the year.

Zhou Liu Fu, which once expanded rapidly via a franchise model and a "channel-first" strategy to penetrate third- and fourth-tier cities (with 55% of its stores located in lower-tier cities), has entered a period of strategic store contraction.

Behind this strategic contraction, performance data shows that from 2022 to 2024, Zhou Liu Fu’s revenue was RMB 3.102 billion, RMB 5.150 billion, and RMB 5.718 billion, respectively, with a Compound Annual Growth Rate (CAGR) of 35.8%. During the same period, net profits were RMB 575 million, RMB 660 million, and RMB 706 million, with a CAGR of 10.8%.

However, the revenue growth rate plummeted from 66% in 2023 to 11% in 2024, while the net profit growth rate dropped from 15% to 7%, indicating a significant downward trend. Although revenue grew slightly in 2025, the growth rate continued to decelerate.

Zhou Liu Fu is currently focusing on online platforms to open up new growth points. Through emerging channels such as Douyin and Xiaohongshu, the proportion of online sales revenue rose from 12.9% in 2021 to 40% in 2024. In the first half of 2025, online sales exceeded offline sales for the first time, contributing RMB 1.632 billion and accounting for over 50% of total revenue.

Franchise System Becomes a "Burden" with Over 97% Franchised Stores

In 2025, the world witnessed gold prices rise from $2,641 per ounce to the current $5,100.

NewTimeSpace understands that behind the surge in gold prices, China's gold and jewelry retail industry is undergoing an "active slimming" process. This trend is evident not only in Zhou Liu Fu but also in leading brands such as Chow Tai Fook, Chow Sang Sang, Lao Feng Xiang, and Chow Tai Seng.

Multiple financial reports indicate that as of the first three quarters of 2025, Chow Tai Fook saw a net reduction of 1,022 stores in nine months—averaging nearly four closures per day—while Chow Tai Seng saw a net reduction of 333 stores compared to the beginning of the year. By the first half of 2025, Chow Sang Sang saw a net reduction of 74 stores across its various brands in mainland China.

Notably, almost all the stores closed by these brands were franchised. Financial data shows that during the reporting period, Chow Tai Seng’s franchised stores decreased by 380 to 4,275, while its self-operated stores saw a net increase of 47 to 400. Lao Feng Xiang reduced its franchised stores by 166 to 5,641 in 2024, and further reduced them to 5,362 in the first half of 2025.

In the view of industry insiders, between the opening and closing of gold shops, the industry is entering a new competition cycle centered on efficiency and brand experience. The higher the gold price, the more the vulnerability of the traditional model is exposed; fewer stores, conversely, represent a brand's return to rationality and efficiency.

Statistics released by the China Gold Association earlier this month show that in 2025, domestic gold consumption was 950.096 tons, down 3.57% year-on-year, with the consumption of gold bars and coins surpassing gold jewelry consumption for the first time. Specifically, gold jewelry consumption was 363.836 tons, a year-on-year decrease of 31.61%, while gold bar and coin consumption was 504.238 tons, a year-on-year increase of 35.14%.

Orient Securities stated that under the sustained high price of gold, the consumption volume of domestic gold jewelry has been significantly suppressed, while investment-oriented products like gold bars and coins have seen a rapid year-on-year increase in consumption, greatly exceeding jewelry in absolute volume. The bank believes the impact of high gold prices on the consumption structure of gold jewelry is likely to continue through 2026.

Regarding store count, even after closing 280 franchised stores, Zhou Liu Fu still held 3,857 stores as of the first half of 2025, including 3,760 franchised stores and 97 self-operated stores. The franchise ratio remains as high as 97.43%.

In terms of revenue scale, while Zhou Liu Fu achieved RMB 3.15 billion in the first half of 2025, Lao Pu Gold (Old Mould Gold) achieved a net profit comparable to Zhou Liu Fu with only 41 fully self-operated stores.

The "asset-light, fast-network" model of the franchise system previously boosted brand growth. However, the sustained rise in gold prices, along with increasing rent and labor costs and more rational consumer behavior, has severely compressed franchisees' profits and caused operational pressure to surge. The franchise system has now become an "invisible burden" for gold and jewelry enterprises and a "performance constraint" for leading brands.

NewTimeSpace Disclaimer: All content herein is the original work of NewTimeSpace. Any reproduction, reprinting, or use of this content in any other manner must clearly indicate the source as "NewTimeSpace". NewTimeSpace and its authorized third-party information providers strive to ensure the accuracy and reliability of the data, but do not guarantee the absolute correctness thereof. This content is for reference only and does not constitute any investment advice. All transaction risks shall be borne by the user.