Last year’s revenue exceeded 9 billion yuan. Leading fashion jewelry brand Chao Hong Ji re-initiates its Hong Kong IPO.

Viewpoint Network: In 2025, the surge in gold consumption swept across the country. Amid ongoing rises in international gold prices, jewelry products that combine value-preservation attributes with fashion expression have drawn unprecedented market attention. Compared with fine-gold jewelry sold on a per-gram basis, which offers greater pricing flexibility, “one-price” items became more popular in 2025.

Against this backdrop, Chow Tai Fook Contributed an impressive set of results. In 2025, Chow Tai Fook achieved operating revenue of RMB 9.32B, a year-on-year increase of 42.96%; attributable net profit to shareholders of RMB 497M, a year-on-year increase of 156.66%; and non-recurring profit (after deducting non-recurring items) of RMB 518M, a year-on-year increase of 176.84%.

As the company’s core business, the jewelry segment’s revenue share climbed to 97.2%. Operating performance topped RMB 9.0 billion, reaching RMB 1.16B, setting a historical high.

In fact, Chow Tai Fook successfully listed on the Shenzhen Stock Exchange as early as early 2010, becoming the first fashion jewelry company listed in A-shares.

With development needs in mind, in May 2025, Chow Tai Fook proposed plans to issue H-shares and list on the Hong Kong Stock Exchange (HKEX) in order to further advance the company’s global strategic layout, enhance the image of its international brand, and strengthen connection with overseas capital markets. That same year, in September, Chow Tai Fook formally submitted its listing prospectus to HKEX, taking a key step in building the “A+H” dual-capital platform.

However, after a six-month waiting period, Chow Tai Fook’s listing progress on HKEX’s Main Board did not achieve any material breakthrough. Shortly after the release of its 2025 annual performance, Chow Tai Fook quickly updated its HKEX offering documents and once again accelerated its push for an H-share listing.

Jewelry business 1+N

Chow Tai Fook was founded in 1996 and started out in Shantou. It created the “CHJ Chow Tai Fook” brand. For quite a long time, the company’s brand lineup was relatively single. However, in 2014, Chow Tai Fook completed the acquisition of the well-known fashion handbag brand “FION Fionny” in the Asia-Pacific region.

Perhaps at the time, Chow Tai Fook’s plan was to expand its business footprint and launch more consumer categories toward younger markets. But in hindsight, this company that began with jewelry ultimately focused on the jewelry industry. And this deal, which could be considered a “trial,” later became a drag on performance.

It is understood that Chow Tai Fook completed its acquisition of 100% equity interest in Fionny Ltd. in 2014. The acquisition formed goodwill of approximately RMB 209.06M. Chow Tai Fook previously stated that, after completing the acquisition of the “FION Fionny” brand, it actively upgraded and reshaped the brand image, products, and stores of FION Fionny. However, due to various factors, the overall progress did not meet expectations.

For the fiscal years 2018, 2019, 2022, 2023, and 2024, impairment tests were conducted based on assessment results from intermediary institutions, and goodwill impairment provisions of RMB 151.59M, RMB 80.66M, RMB 8,066.35 million, RMB 3,943.26 million, and RMB 39.43M were recorded, respectively, totaling RMB 657 million. After the provision was made, the book value of goodwill formed from the acquisition of Fionny Ltd. was RMB 506 million.

In 2025, Fionny added approximately RMB 171 million in goodwill impairment provisions. By this point, total goodwill impairment provisions were approximately RMB 829 million, and the book value of goodwill further decreased to RMB 334 million. Meanwhile, Chow Tai Fook’s profitability performance was also affected accordingly.

It is worth noting that before 2025, Chow Tai Fook’s operating revenue, broken down by industry, included jewelry, leather goods, and other industries. In product-level disclosures, the “leather goods” category where Fionny was located was listed separately. In 2025, however, sales related to “leather goods” were merged into other items and no longer disclosed separately.

This adjustment in disclosure scope also indirectly reflects a shift in the company’s strategic focus. The independent presentation of non-core businesses was gradually weakened, and the development direction of the jewelry main business became even more concentrated.

The adjustment was not achieved overnight. While making goodwill impairment for Fionny, Chow Tai Fook, based on brands it had cultivated and established in recent years—such as “CHJ Chow Tai Fook | Soufflé,” “Zhen ZHEN,” and “Cëvol”—to meet different market needs, referred to this as a “1+N” strategy.

Data source: announcements, publicly available information online; compiled by Commercial Guest

Specifically, the core brand CHJ Chow Tai Fook’s main products are classic gold jewelry and fashion jewelry. Many of Chow Tai Fook’s “mainstream-breaking” products also come from this brand. Among domestic jewelry brands, Chow Tai Fook has won a large number of young consumers by its enthusiasm for IP collaborations.

As of 2025, Chow Tai Fook has collaborated with 12 IPs, including Sanrio (Sanrio), Doraemon, Crayon Shin-chan, Line Friends (the line dog), Minions and Butter Bear, among others. The products launched cover gold beaded bracelet series, giving consumers room to create personalized accessories through interchangeable beaded charms.

“Chow Tai Fook | Soufflé” focuses on the mid-to-high-end jewelry market. Under its core positioning of “gifting,” the brand’s “sense of ceremony” is reflected in subtle details such as packaging design. By the end of 2025, the number of Chow Tai Fook | Soufflé stores reached 96.

“Zhen ZHEN” is rooted in traditional gold and silver craftsmanship and combines contemporary design with lifestyle fashion needs. It may not chase trends, but it interprets timeless Eastern jewelry aesthetics through rich cultural meaning and value-preservation capability.

In 2025, the “Zhen ZHEN” experience store officially opened at the “Zhenbao Museum,” marking a key step for the brand in its tangible rollout and commercialization exploration, and laying practical groundwork for subsequent independent stores and operations targeting high-end customer segments.

“Cëvol” is also a jewelry brand aimed at younger consumers, but its products are centered on cultivating diamonds. Compared with natural diamonds, cultivated diamonds are often purer because their production environment is controllable. Although they may lack the individuality formed naturally, they are more affordable due to lower production costs, and therefore have won the favor of many consumers.

Overall, Chow Tai Fook has built a diversified jewelry brand matrix centered on “CHJ Chow Tai Fook” and has formed a clear profile of its user base. From 2023 to 2025, the jewelry business’s revenue share continued to rise, reaching 93.2%, 95.4%, and 97.2%, respectively, maintaining a firm position as the company’s core business. At the same time, the handbag product line continued to contract: its revenue share declined year by year, at 6.4%, 4.2%, and 2.4%, respectively.

According to information from Frost & Sullivan, for the fashion jewelry market, based on 2024 revenue, among the many jewelry companies in mainland China, Chow Tai Fook ranks first with a market share of 1.4%. However, in the overall jewelry market, among the many jewelry companies in mainland China, Chow Tai Fook ranks ninth with a market share of 0.8%.

According to its plan, Chow Tai Fook will continue to strengthen its brand portfolio and achieve synergistic effects across brands. To further reinforce its brand differentiation advantages and capture growing demand for customized luxury products, it plans to open three “Zhen ZHEN” flagship stores in top shopping malls in China’s first-tier cities and new first-tier cities.

In Chow Tai Fook’s view, products will still be at the core of the brand. Therefore, in its HKEX prospectus, the company stated that it will continue to devote itself to product development and create a distinctive product mix, in order to strengthen the highly differentiated brand image and positioning of different brands.

“To enhance our brand awareness and influence, we will also formulate marketing strategies, strengthen storytelling about brand identity, and enhance brand awareness for our different brands. We believe that, by strengthening brands beyond CHJ Chow Tai Fook, the company can open up new sources of revenue, quickly respond to emerging trends, and consolidate its competitive advantages in the active jewelry and handbag industries.”

Franchise/Agency Model and the Gains and Losses of Globalization

As the core business of Chow Tai Fook, the jewelry segment achieved operating revenue of RMB 9.04 billion in 2025, accounting for 97% of total revenue. In terms of specific product sales, Chow Tai Fook mainly uses models such as self-operated sales, franchising/agency, and online sales, with only a small portion of products sold via other sales models.

Among these, the franchising/agency model accounts for a relatively large share. Taking 2025 as an example, within the jewelry business, revenue from the three major core sales channels—self-operated stores, franchising/agency, and online sales—accounted for 21.25%, 62.21%, and 10.73% of total revenue, respectively, representing year-on-year growth of 8.35%, 79.77%, and 2.84%, respectively.

The franchising/agency model refers to the authorization by brands under Chow Tai Fook to franchisees or agents. Franchisees then open brand-exclusive stores at designated locations. The franchisees control the relevant people, assets, and operations, and operate under the company’s unified management model.

Although the self-operated model is more favorable for brand control, it requires greater asset investment and is constrained by available capital and the management radius, making it difficult to expand quickly. The franchising/agency model, on the other hand, helps to quickly push down and penetrate into markets; by collecting franchise fees, it can also generate stable non-product-related income.

Chow Tai Fook stated that in recent years, on the basis of standardizing store operations, it accelerated channel expansion through the franchising model and continued to expand market coverage. Not only has it established good strategic cooperation relationships with chain commercial channels such as China Resources Vanguard, Wanda, Longfor, Intime, and New Town Wuyue, it has also successfully entered top domestic commercial complexes such as SKP, K11, Henglong, Taikoo Li, Vanke World, and Raffles City.

By the end of 2025, Chow Tai Fook had a total of 1,668 jewelry stores, including 1,486 franchise stores, accounting for 89%. For 2025 alone, the net increase in stores for the full year was 163. Among them, franchise stores had a net increase of 214, while directly operated stores decreased by 55 net, leaving 184.

According to the updated prospectus, Chow Tai Fook said that one of the main reasons for the overall net decrease in self-operated stores was that self-operated stores were converted into franchise stores.

“We assess whether, by taking over self-operated stores, the franchisees would have a deeper understanding of the local market, such that the benefits generated under the franchising model would exceed those under the self-operated model. Based on this assessment, we would determine whether to convert to the franchising model. We can also evaluate whether the conversion model would promote business development in the relevant regions, and this would allow us to streamline operations and transfer business risks to franchisees. According to internal policy, if we assess that the additional profits from converted stores would be higher than maintaining the self-operated model, we would accept the conversion model. The reason self-operated stores were closed is that the shopping malls where they are located closed, or the shopping malls’ performance did not meet expectations, or the self-operated stores were not profitable.” the company said.

The advantages of franchise stores are clear, but its downsides cannot be ignored. In 2025, in the jewelry business, the gross margin of revenue under the franchising/agency sales model was only 17.5%, while the gross margin under the self-operated and online sales models was 34.12% and 19.68%, respectively.

This gap reflects that, although the franchising model helps to expand the store network quickly and reduce capital expenditures, its contribution to overall profitability is relatively limited. With the franchise share remaining high, Chow Tai Fook’s profit performance is subject to some constraints. Even though revenue scale is substantial, Chow Tai Fook still needs to further optimize its channel structure to enhance profit resilience.

In addition, although Chow Tai Fook is headquartered in Guangdong, it has accumulated strong regional advantages in East China.

By region, East China generated operating revenue of RMB 176.81M in 2025, accounting for as much as 44.52% of total revenue. Second was South China, accounting for 10.2% of total revenue. Meanwhile, South China, where the headquarters is located, ranked only third, with revenue share dropping to 8.62%.

Compared with balancing revenue performance across domestic regions, Chow Tai Fook chose to move into overseas markets. It is understood that in 2024, Chow Tai Fook took an important step in taking its brand overseas: it opened stores one after another in Malaysia, Thailand, Cambodia, and Singapore, actively exploring a second growth curve and laying a foundation for future international development.

By the end of 2025, Chow Tai Fook had 11 overseas stores, including 1 self-operated store in Malaysia, 1 franchise store in Singapore, 2 franchise stores in Malaysia, 4 franchise stores in Thailand, and 3 franchise stores in Cambodia.

In terms of overseas market layout, Chow Tai Fook will continue to pursue a dual-track approach, while using both self-operated and franchise stores to establish sales points. In the company’s view, this hybrid model allows it to combine the advantages of two operating strategies—using the self-operated stores’ control and consistency together with the franchise stores’ scalability.

After listing on the Shenzhen Stock Exchange in 2010, Chow Tai Fook again targeted the Hong Kong Stock Exchange. Besides broadening financing channels, it is also clearly considering leveraging Hong Kong’s regional advantages to improve global brand visibility and accelerate its overseas market deployment.

According to the prospectus, Chow Tai Fook plans to use part of the raised funds to establish 20 self-operated CHJ Chow Tai Fook brand stores overseas to expand its international sales network. By the end of 2028, it will open 20 self-operated stores in Cambodia, Singapore, Malaysia, and Korea/Japan. Among them, 4, 6, and 10 self-operated stores will open by the end of 2026, 2027, and 2028, respectively.

In addition, Chow Tai Fook plans to set up a new office in Hong Kong as the overseas operations headquarters to oversee and manage overseas operations.

Disclaimer: The content and data in this article are compiled by Viewpoint based on publicly available information and do not constitute investment advice. Please verify before use.