Lao Feng Xiang Co., Ltd. (600612) reported a 40% year-on-year decline in both first-half revenue and net profit attributable to shareholders, with the second-quarter downturn intensifying. On August 26, the gold jewelry brand released its interim report, showing total operating revenue of RMB 19.987 billion for the first half, down 40.08% year-on-year; net profit attributable to listed shareholders of RMB 716 million, down 41.34%; and basic earnings per share of RMB 1.3684, also down 41.34%.

In the second quarter alone, Lao Feng Xiang Co., Ltd. recorded operating revenue of RMB 6.245 billion, a sharp 60.56% decline year-on-year, while net profit attributable to shareholders tumbled 72.21% to RMB 169 million. The company's core business spans three segments: gold jewelry and ornaments under the "Lao Feng Xiang" brand, arts and crafts under the "Gongmei" label, and writing instruments and educational supplies under brands like "Zhonghua." However, the latter two segments contribute minimally to revenue, with Shanghai Lao Feng Xiang Co., Ltd. accounting for 99.33% of total revenue and 98.58% of total profit.

Regarding the revenue decline, Lao Feng Xiang Co., Ltd. attributed it in its financial report to reduced revenue from its second-tier subsidiary Shanghai Lao Feng Xiang Co., Ltd. and third-tier subsidiary Shanghai Lao Feng Xiang Silver Building Co., Ltd. Notably, despite the significant revenue drop, selling expenses rose 12.37% year-on-year to RMB 474 million, driven by increased advertising and sales service fees at the second-tier subsidiary. Net cash flow from operating activities swung from positive to negative, down 104.42% year-on-year, primarily due to reduced cash receipts from sales of goods and services.

As of the end of June 2026, Lao Feng Xiang Co., Ltd. operated 4,916 sales outlets both domestically and internationally, including 213 directly-operated stores (16 overseas) and 4,703 franchise stores. During the reporting period, the company's outlet count decreased as it proactively optimized its franchise network. In the first half of 2026, the company closed 342 low-efficiency franchise stores in third- and fourth-tier cities, accounting for about 63% of total franchise store closures, while opening 71 new franchise stores in first- and second-tier cities, representing approximately 67% of new franchise store openings.

Gold jewelry companies generally faced earnings pressure in the second quarter. On August 25, Laopu Gold (6181.HK) and Chow Tai Seng (002867) each disclosed their interim results. Laopu Gold posted first-half sales of RMB 22.78 billion, up 60.6% year-on-year, with revenue of RMB 19.808 billion, up 60.3%, and adjusted net profit of RMB 4.32 billion, up 83.6%. However, its second-quarter net profit is estimated to fall between RMB 520 million and RMB 720 million, with revenue ranging from RMB 2.308 billion to RMB 3.308 billion—a sharp sequential decline from the first quarter. Chow Tai Seng reported first-half operating revenue of RMB 3.641 billion, down 20.79% year-on-year, with net profit attributable to shareholders of RMB 450 million, down 24.24%. Its second-quarter revenue is estimated at RMB 1.687 billion, down 12.30%, while net profit attributable to shareholders plunged 54.12% to RMB 157 million.

Most of these companies cited the impact of high and volatile gold prices in the second quarter. Lao Feng Xiang Co., Ltd. noted in its report that as of the end of June 2026, the London spot gold fixing price stood at USD 4,026.05 per ounce, down 8.22% from the start of the year, while the Shanghai Gold Exchange Au9999 closing price was RMB 879.03 per gram, down 11.21% from the opening price of RMB 990.00 per gram at the beginning of the year. Although gold prices have fallen, they remain at elevated levels, with short-term volatility intensifying and market risks increasing. According to data from the China Gold Association, gold consumption in China reached 511.412 tonnes in the first half of 2026, up 1.23% year-on-year. This included 132.133 tonnes of gold jewelry, down 33.88%; 339.336 tonnes of gold bars and coins, up 28.42%; and 39.943 tonnes for industrial and other uses, down 2.90%.

As of the close on August 26, Lao Feng Xiang Co., Ltd. shares fell 2.08% to RMB 34.81 per share.