Editor’s Note
Goldman Sachs forecasts a slowdown in China’s jewelry market growth to 4% this year, citing a higher base, demand normalization, and still-fragile consumer purchasing power. The firm maintains a “neutral” view on the sector.
Goldman Sachs published a report, forecasting that the growth of China’s jewelry market will slow to 4% this year. This compares to a growth of approximately 10% last year, which was driven by a strong gold price upcycle from a low base, and the sector’s stock prices significantly outperforming the Hang Seng Index. Consequently, due to the higher base, normalization of demand, and still unstable overall consumer purchasing power, the firm holds a “neutral” view on the sector for this year.
The firm targets a year-end gold price of $5,400 per ounce, representing a 25% year-on-year increase. In an environment where gold prices are still rising rapidly (albeit more moderately compared to last year), it is expected that demand and value growth will continue to be supported by the sustained rise in gold prices. However, the gross profit margins of products priced by weight will face year-on-year headwinds, and volume consumption is likely to remain under pressure.
The firm believes that Lao Pu Gold (06181.HK) possesses growth opportunities. It reiterated its “Buy” rating on the stock with a target price of HK$1,128. Goldman Sachs believes that Lao Pu Gold’s profit growth in 2026 will benefit from customer growth driven by brand and product cycle upturns, store network expansion, and gross margin improvement.