During the holiday, the national gold sales grew strongly, and many securities companies believed that the gold and jewelry market remained high.
three factors promote this round of gold market
Since the second half of 2020, gold consumption has maintained a high boom, Sealand Securities Co.Ltd(000750) the current round of gold boom is mainly driven by three factors: wedding, investment and the rise of Gufa gold, and the driving factor has gradually changed from price factor to quantity factor.
From the second half of 2020 to the second half of 2021, gold consumption continued to boom. The wedding and investment demand in the second half of 2020, as the main factor, promoted the industry recovery. In 2021, the impact of wedding and investment demand weakened. Under the resonance of supply and demand, the upgrading of ancient French gold products created new demand and continued the boom trend of rapid growth of gold consumption.
With the explosion of demand for Gufa gold products and the weakening of wedding and investment demand, the driving factor of industry prosperity has gradually changed from the price factor from the second half of 2020 to the first half of 2021 to the quantity factor in the second half of 2021.
during the Spring Festival holiday, the national gold consumption demand is strong
Sealand Securities Co.Ltd(000750) believes that due to the gradual release of wedding leave suppressed by the previous epidemic, the gold price tends to be stable after the decline, the consumption of “pleasing oneself” and the national tide culture, the gold jewelry industry has maintained a high boom.
According to the data of the National Bureau of statistics, the monthly retail sales of gold, silver and jewelry commodities have recovered strongly since 2020. In 2021, the retail sales of gold, silver and jewelry increased by 29.8% year-on-year, outperforming the growth rate of total social zero by 17.3 percentage points.
During the Spring Festival holiday in 2022, the national gold consumption also showed strong performance. According to the data of China National Gold Group Gold Jewellery Co.Ltd(600916) Association, during the Spring Festival in 2022, the national gold consumption increased by 13% year-on-year, and the gold jewelry consumption in first tier cities such as Beijing, Shanghai and Shenzhen increased by more than 15% year-on-year. From the online data, K-gold jewelry on Taoxi platform has maintained strong growth since the fourth quarter of 2021, with monthly increases of 26%, 61%, 28% and 100% respectively.
looking forward to 2022, the gold market may continue to be high
Sealand Securities Co.Ltd(000750) believes that,
the short-term decline of short-term gold price has a positive stimulating effect on consumption
The short-term decline helped stimulate consumption. according to the previous conclusion of Sealand Securities Co.Ltd(000750) based on the relationship between gold price and consumption, it is expected that the short-term decline and long-term stable rise of gold price will boost consumption. The expectation of fed interest rate increase will put pressure on gold price in the short term, but help to stimulate consumption.
the Fed’s expectation of raising interest rates appeared last year, the market gradually digested, and the long-term impact on the future gold price is limited under the uncertainty of the epidemic outside China. since September 2021, the Federal Reserve and several European central banks have gradually released the expectation of raising interest rates, putting some pressure on the price of gold. The market gold price performance has reflected the expectation of interest rate increase to a certain extent, and the long-term impact in the future is limited. Under the background of high uncertainty in the current situation of epidemic prevention and control outside China, the risk aversion attribute of gold makes the gold price still relatively strong in the long run.
gold consumption is still hot under the expectation of interest rate increase. under the expectation of the Fed’s interest rate increase, gold consumption is still hot in the second half of 2021. The zero data of gold and silver jewelry agency in September / October / November is still more than 10% higher than that in 2019.
long term drive: new process gold jewelry creates incremental demand, and Gufa gold has a strong growth momentum
The new process can replace the traditional gold, but it also creates incremental demand, and Gufa gold has a strong growth momentum. Ancient gold, 3D / 5D / 5G gold and other new process gold ornaments are the main incremental sources in recent years.
The power for the rise of buy it now gold comes from the supply side, while gufajin has the advantages of sufficient grams and profound cultural heritage, which fully meets the market demand and is easier to rise. Buy it now products rose in the profit bottleneck period of the original gold product structure. The way of pricing by piece effectively improved the profitability of jewelers. Then, merchants strengthened efforts to guide market consumption habits, and the proportion of buy it now products gradually increased. In recent years, the rise of UGC platforms such as xiaohongshu has accelerated the dissemination of market information. The disadvantages of buy it now gold, such as higher actual gold price, different purchase rules and difficulty in secondary repair after damage, are becoming more and more known to consumers. Instead, it is easier to accept gufajin priced by gram. Gufajin has an irreversible impact on the substitution of buy it now products. Although the gross profit of ancient French gold is low, it has the advantages of sufficient grams and rich cultural connotation suitable for the national trend, which is easier to measure, or it can become an anchor for the development of the industry in the next stage.
On the whole, the short-term decline of gold price + strong growth momentum of gufajin, and the high outlook of gold jewelry is expected to continue in 2022.
investment logic
The gold jewelry industry is expected to further expand its scale as a tool to fight inflation, while the gold jewelry industry is expected to continue to be favored by investors in the long term. During the epidemic period, leading enterprises opened stores against the trend, seized the market by seizing channels, upgrading brands and developing new products, and continued to be optimistic about the leading enterprises of gold and jewelry with increased share.
related subject matter:
Zhou Dafu (1929. HK): the moat of the company lies in its obvious channel advantages and strong profitability of terminal channels. The company benefits from the release of wedding market demand brought by consumption recovery in the short term and the dividend of leading brands brought by the improvement of industry concentration under the background of common prosperity and the rise of national tide in the long term. The potential growth point lies in the rapid development of e-commerce business and the second growth curve of jewelry sub brands.
Lao Feng Xiang Co.Ltd(600612) (600612. SH): the company is a leading enterprise in the jewelry industry. The company is mainly engaged in the production, operation and sales of gold jewelry, arts and crafts, pens and stationery products.
Liufu group (0590. SH): the company is one of the major jewelry retailers. The group is mainly engaged in the procurement, design, wholesale, trademark authorization and retail business of all kinds of yellow platinum jewelry and jewelry products.
(source of report: Sealand Securities Co.Ltd(000750) , Wanlian securities; the information in this article does not constitute any investment suggestions. The contents published are from licensed securities institutions and do not represent the views of the platform. Investors are requested to make independent judgment and decision.)
