Editor’s Note
HSBC Global Research has initiated coverage on Chinese jeweler Lao Feng Xiang, suggesting it has the potential to compete with established Western luxury brands. This analysis highlights the evolving dynamics within the global high-end jewelry market.
On November 10, in a report titled “A New Luxury Brand Challenges Global Jewelry Giants,” HSBC Global Research initiated coverage on Lao Feng Xiang (6181.HK) for the first time, assigning a Buy rating with a target price of HK$973.7.
HSBC believes that Lao Feng Xiang should not be categorized as a traditional gold jewelry stock but should be included in the valuation system for national luxury brands.
Lao Feng Xiang has broken the preconception that “Chinese brands can only target the mass market.” HSBC data shows that in the high-end segment of the Chinese mainland jewelry market (accounting for 5% of the total) in 2024, Lao Feng Xiang’s market share surged from 10% in 2023 to 26%, while Tiffany and Cartier’s shares fell by 8% (to 31%) and 2% (to 11%), respectively, during the same period.
Considering cultural and investment attributes, Lao Feng Xiang has attracted numerous followers from the crowd of Western luxury brand consumers. 77% of Lao Feng Xiang’s customers also purchase top international brands like Louis Vuitton and Hermès, proving that Lao Feng Xiang has captured the mindshare of the same customer group.
HSBC analysis attributes Lao Feng Xiang’s success to “dual-wheel drive.” Firstly, amid the upward trend in gold prices, it seized the opportunity with its unique positioning and exceptional products. Particularly in the high-end product segment, the industry recognizes that Lao Feng Xiang has formed a “significant lead” advantage. Its retail sales are 2.5 times that of its closest competitor in the mainland, highlighting its absolute dominance in the ancient gold jewelry field.
More importantly, the brand value of Lao Feng Xiang, including exquisite craftsmanship, cultural storytelling, high-value customer base and service, prudent expansion, and overseas sales strategies, is its exclusive secret to maintaining an absolute advantage.