【China】Soaring Profits and Stock Price: How Long Can Lao Feng Xiang’s High-End Jewelry Story Last?

While the jewelry industry faces widespread performance challenges, Lao Feng Xiang has once again surprised everyone. On the evening of February 20th, Lao Feng Xiang released its full-year 2024 profit forecast, expecting to achieve a net profit of 1.4 to 1.5 billion yuan, representing a year-on-year growth of 236% to 260%.

In the performance forecast, Lao Feng Xiang pointed out that the expected growth is due to the significant increase in overall store revenue brought by the brand’s expanding market influence and evident advantages. Additionally, the continuous optimization and innovation of products, as well as the addition and expansion of stores, have contributed incremental revenue.

Lao Feng Xiang, which claims to be China’s first brand promoting “ancient-method gold,” has been riding high with its store network and business model similar to luxury brands. Following the significant performance improvement, its stock price has also been soaring since its listing last year.

During this year’s Spring Festival period, Lao Feng Xiang was one of the jewelry brands that attracted the most attention: soaring gold prices did not dampen consumers’ shopping enthusiasm, with queues lasting for hours at stores in various locations. News of daily gold purchases exceeding ten thousand grams frequently flooded screens. Lao Feng Xiang’s “one-price” pricing model, which fluctuates with gold prices, appears more “cost-effective” and attracts a large number of consumers, making Lao Feng Xiang a “consumer marvel.”

There exists a subtle cognitive gap among gold jewelry consumers. Those who recognize Lao Feng Xiang feel it is like a “bright pearl” on a temple, a luxury item from Cartier or Tiffany, while other brands are merely called gold jewelry. Lao Feng Xiang spares no effort in building a “high-end image,” precisely targeting a group of people who buy high-priced jewelry: those who cannot completely ignore material purchases based solely on the brand when buying luxury jewelry, and who consider traditional gold jewelry brands not fashionable enough.

Thus, under the packaging of non-heritage, tradition, and ancient-method concepts, and leveraging high cost-effectiveness, Lao Feng Xiang has carved a bloody path out of the red ocean. Concept marketing and capital support have put Lao Feng Xiang in the spotlight, also allowing investors behind it to reap substantial rewards.

Last June, Lao Feng Xiang listed in Hong Kong at HK$40.5 per share, soaring over 60% on its first trading day. Since then, the stock price has continued to climb. On February 21, 2025, Lao Feng Xiang’s stock price surged again, closing at HK$548.5 per share that day, up over 17%, with a total market capitalization of HK$92.349 billion.

In mid-February, a consumer expressed this at the entrance of a Lao Feng Xiang boutique in Harbour City, Hong Kong. That day, Lao Feng Xiang’s boutique had a “spend 1000, get 100 off” promotion. Combined with the exchange rate difference, it could save a lot of money, attracting opportunistic customers to buy in.

It’s not just Hong Kong; Lao Feng Xiang stores in Beijing, Shanghai, Guangzhou, Shenzhen, and other places often see queues.

Shenzhen gold consumer Liu Meigao told a 21st Century Business Herald reporter.

Lao Feng Xiang follows the service principles of luxury stores: providing “one-on-one” shopping service and limiting customer flow. Under conditions of large queuing crowds, Lao Feng Xiang goes a step further in service by distributing bottled water, NFC orange juice, and beverages and snacks like Coke and KitKat to queuing customers. All the details make the customer experience full.

While focusing on the consumer experience, Lao Feng Xiang is even more relentless in marketing. Craftsmanship is one of Lao Feng Xiang’s selling points, claiming to be the first brand to introduce full-gold inlaid with diamonds and gold foil enamel techniques. It sells through spot sales, usually not accepting pre-orders. Popular styles are often out of stock, and the shortage phenomenon becomes more pronounced during promotional periods or before price increases.

A water and gold jewelry supplier told a 21st Century Business Herald reporter,

Comparable data shows that about 40% of Lao Feng Xiang’s gold jewelry is “outsourced” rather than from its own factories. According to its prospectus, some of its products are outsourced to processing suppliers. From 2021 to 2023, the output of Lao Feng Xiang’s outsourced production accounted for 36%, 32%, and 41% of total output, respectively. Over the three-year period, Lao Feng Xiang paid a total processing fee of 74.5 million yuan for this.

From the perspective of store quantity, Lao Feng Xiang chooses a relatively high-end path. According to financial report disclosures, as of June 30, 2024, Lao Feng Xiang had opened 33 self-operated stores in 14 cities, all located in well-known commercial centers, including 4 in the SKP system and 10 in the MixC World system.

Jewelry industry brand marketing expert Wu Deji analyzed that Lao Feng Xiang insists on a direct sales model and does not open加盟. This strategy is highly consistent with its positioning as a high-end luxury brand. The direct sales model not only helps maintain brand tone and quality control but can also maintain market scarcity by controlling supply, thereby forming a differentiated advantage in the high-end market.

No matter how many marketing tricks Lao Feng Xiang employs or how special its service methods are, they are not enough to dictate consumer behavior. As a “luxury item” itself, an important aspect driving consumers to purchase Lao Feng Xiang is the “cost performance” that seems incompatible with its own positioning—a delicate balance between investment and consumption.

In the view of gold store salespeople and gold consumers interviewed by the 21st Century Business Herald, Lao Feng Xiang’s styles are not considered expensive compared to traditional gold jewelry brands. This is mainly because Lao Feng Xiang uses a “one-price” pricing model. Compared to the gold price + labor cost model of other brands, in the same ancient-method gold track, it is反而 more cost-effective.

For example, on the official online flagship store, a 9.2-gram full-gold flower and leaf necklace with full inlaid diamonds from Lao Feng Xiang is priced at 13,600 yuan, equivalent to about 1,478 yuan per gram. A similar leaf necklace from Chow Tai Fook’s Palace Museum series weighs 6.2 grams but is priced at 16,800 yuan, equivalent to a high price of 2,709 yuan per gram.

Already having a pricing advantage, Lao Feng Xiang also frequently has promotional activities. Through methods like participating in mall points and “spend 1000, get 100 off,” the price can be further discounted.

Li Xin told a 21st Century Business Herald reporter. She is a gold jewelry enthusiast who owns over a hundred pieces of gold jewelry.