45 stores generate 27 billion in revenue—has the old shop Golden's dream of becoming the "Oriental Hermès" come true?

As international gold prices have been pulling back one after another at the start of 2026 and the entire gold sector has come under pressure, a financial report from Lao Feng Xiang Gold has nevertheless made the market feel unexpectedly surprised.

In 2025, the company’s revenue grew 220% year over year, net profit grew by more than 230%, and its in-store performance topped the world among luxury brands, ranking #1; entering 2026, the expected profit for the first quarter is even close to 70% of the full year. With this kind of growth rate, amid today’s consumer environment, it almost seems unbelievable.

But the market’s reaction has not been uniform. Around the time the earnings report was released, the company’s share price had already fallen by nearly half from its historical peak. A typical split is taking shape: fundamentals are accelerating, while valuation is retreating.

Questions have emerged as well: when a company explodes against the trend during an industry downturn cycle, does it truly signal structural opportunities, or is it a stage of prosperity that’s being magnified?

The significance of Lao Feng Xiang Gold is no longer just about “how much money it makes by selling gold,” but that it is touching a bigger proposition:

Is China in the process of giving birth to the first homegrown luxury brand with global storytelling capability?

From gold to luxury: a “category restructuring” that’s been undervalued

Judging from the financial data, Lao Feng Xiang Gold is almost an “anti-common-sense” case.

With only 45 stores, the company has achieved a revenue scale of more than 27 billion yuan. This figure not only far exceeds that of traditional domestic gold jewelry brands, but is even approaching the level of core stores of certain international luxury brands.

This means its growth is not dependent on the traditional logic of “scale expansion” in retail; instead, it is built on a higher-dimensional efficiency model—using very few stores to tap extremely high-density consumer spending.

Behind this efficiency is a fundamental change in product logic.

Traditional gold jewelry is, in essence, a commodity business priced “by the gram.” Its value is anchored to fluctuations in gold prices, and consumers’ buying motivations are highly dependent on “value preservation” and investment attributes. Lao Feng Xiang Gold, however, is trying to break this logic and transform products from “precious metal ornaments” into “cultural consumer goods.”

Centered on intangible-heritage crafts such as cloisonné-style wire inlays, the company embeds Eastern auspicious culture (such as images like gourds and ruyi) into product design, while weakening the concept of “weight,” and strengthening a pricing-by-“piece” approach.

This change may look subtle, yet it directly alters the value-judgment system: prices are no longer determined by raw materials, but formed collectively by brand, craftsmanship, and cultural premium.

As a result, consumer behavior is starting to shift. Multiple surveys show that the overlap between Lao Feng Xiang Gold’s consumers and those of international luxury brands (such as LV, Hermès, Cartier, etc.) has exceeded 80%. This means its user base has moved from traditional gold consumer groups to high-net-worth and high-purchasing-power segments.

In this process, gold’s “currency attribute” has not disappeared—it has been repackaged: it still carries a value-preservation logic, while also adding functions of aesthetics and identity expression. This “dual attribute” gives it stronger persuasive power in consumer decision-making.

In other words, what Lao Feng Xiang Gold has completed is not simply a brand upgrade, but a more fundamental leap—selling gold as luxury.

The cost of growth: when the breakout starts to approach its limits

However, precisely this kind of extreme growth curve has also begun to raise new questions.

For Q1 2026, the company expects net profit of 3.6 billion to 3.8 billion yuan, close to 70% of full-year 2025 levels. Such a highly steep growth trajectory implies that demand is being released rapidly in advance, rather than growing smoothly.

In consumer industries, this is often a double-edged sword: it both represents strong momentum and may also contain risks of over-harvesting.

More importantly, Lao Feng Xiang Gold’s growth structure is not balanced.

As of 2025, more than 82% of revenue still comes from offline stores, and almost all of these stores are located in top commercial districts such as SKP and Mixc. This “high-end channel lock-in” strategy does build brand barriers, but it also limits room for expansion.

Because high-end commercial complexes are scarce resources—the entry thresholds are extremely high and the number of locations is limited. Once the core business districts approach saturation, the marginal space for store expansion will quickly narrow.

This means that the growth logic of Lao Feng Xiang Gold fundamentally depends on a highly closed system:

A limited number of stores + extremely high per-store efficiency + concentrated high-net-worth customer groups.

Once any of these variables fluctuates—such as a downturn in high-end consumption sentiment, weakening wealth effects, or changes in foot traffic in core business districts—its earnings sensitivity will be amplified.

Meanwhile, attitudes from the capital market have also begun to show subtle changes.

Since Lao Feng Xiang Gold listed in 2024, its stock price rose to a peak of 1,108 Hong Kong dollars in July last year, and then started to pull back. As of the close on March 23, its total market capitalization was about 98.7 billion Hong Kong dollars, down about 47% from the historical high set in July 2025.

But after the recent pullback, its market capitalization has retreated to nearly half. This divergence reflects the market’s re-evaluation of a core issue: is current growth a long-term trend, or a short-term concentrated release?

If the market rewarded it with “growth premium” over the past year, then what is showing up now is “a discount to sustainability.”

In other words, Lao Feng Xiang Gold has already shifted from being “undervalued” to being “questioned.”

Industry differentiation begins: China’s gold consumption is being rewritten

In 2025, with gold prices staying at elevated levels for an extended period, the entire gold jewelry industry showed a clear “cold and hot two-sided” pattern. On one hand, traditional brands were under pressure across the board: store closures and revenue declines became the norm. On the other hand, Lao Feng Xiang Gold achieved a doubling of growth against the trend.

This differentiation is not accidental; it comes from fundamental differences between two business models.

Traditional gold brands are still operating within the “commodity logic,” whose core variables are gold prices and the scale of channels. Lao Feng Xiang Gold, however, has entered the “luxury logic,” driven by brand premium and cultural identification.

The gap between the two is not just price—it is a difference in how value is defined.

At the same time, the sub-segment of “ancient-style gold” is rising rapidly. As consumption structures upgrade, demand among high-net-worth groups is gradually shifting from “value preservation” toward “aesthetics” and “cultural expression.” Gold is no longer only an asset allocation tool; it starts to take on more emotional and identity functions.

This trend resonates with the “rise of homegrown cultural trends” and the strengthening of cultural confidence, giving domestic brands for the first time the possibility of challenging the international luxury brand system.

It is precisely in this context that Lao Feng Xiang Gold has been granted even greater room for imagination.

The valuation logic in the capital market for it is undergoing a fundamental switch—from the undervaluation framework of traditional gold retailers to a high-valuation framework when matched against international luxury brands. Whether it’s Tiffany or Cartier, the core of their valuation is not single-product profit, but the brand’s long-term pricing power.

The problem is that such a leap is not easy to complete.

The essence of luxury brands is a product of time. It depends on long-term, stable aesthetic output, tight control of scarcity, and cultural accumulation—not on short-term explosive growth. In other words, the true barrier is not “selling at a high price,” but whether it can continue to be considered worth being expensive.

Lao Feng Xiang Gold has already taken a key step, but it is still in an early stage. What it faces is not only market opportunity, but also a tougher test—how, after rapid expansion, to settle into a brand that can survive through the cycle.

Conclusion

Returning to the original question: what does Lao Feng Xiang Gold’s growth actually mean?

The answer may not be singular. It is both a successful brand reshaping and a challenge to industry logic; it both showcases the potential of China’s consumer upgrading and exposes the fragility of high-end consumption.

In the short term, it may still maintain high growth; but in the long run, its true fate will depend on a more complex variable—whether it can evolve from a “phenomenon-level company” into a “time-tested brand.”

And that is the hardest part of every luxury brand story.

Author: Turkish hot air balloon

Source: Hong Kong Stock Research Society