Old-fashioned gold: building a profit moat with brand assets. Old-fashioned Gold began with Golden Treasure, founded in 2009. The brand is positioned as high-end luxury. The traditional gold process triggered a wave of ancient French gold consumption. Currently, 33 stores have been opened in high-tier cities across the country. As of 2023, the company has achieved total revenue of 3.180 billion yuan and net profit of 416 million yuan, an increase of 116.1%/232.2%, respectively. The business model is expanding steadily with low leverage and light debt. The balance ratio and equity multiplier are both low in the industry. Strong brand strength feeds back net interest rates to support high profitability. The ROE reached 34.9% in 2023.

Ancient gold: culturally integrated design, process innovation requirements. The gold market reached 409.8 billion yuan in 2022, and is expected to grow to 546.5 billion yuan in 2027, a CAGR of 5.9%. Among them, with its deep content and exquisite craftsmanship, the market size of ancient gold has reached 97 billion yuan in 2022, accounting for 24% of the total gold consumption. It is expected to increase to 2025 billion yuan by 2027, with a CAGR of over 15%.

The competitive pattern is highly concentrated. In 2023, the CR5 of the ancient French gold brand reached 46.1%. Among them, Laosupu Gold ranked 7th in the industry with a market share of 2.0%.

Inherit craftsmanship to create the position of luxury in ancient law. Old Shop Gold is one of the top ten most popular jewelry brands among Hurun's high-net-worth individuals. All of its products are developed by senior jewelry masters using ancient techniques. The average production time is about 1-3 months, and a total of 1000+ products have been launched, accounting for 54%/46% of inlay/pure gold revenue in the structure. At the same time, it maintains a classic, extreme, and traditional brand image with high-end pricing. By 2023, the average price of pure gold/inlay products reached 729/1,043 yuan per gram. Looking at the pricing range, in terms of revenue, the average price of 10% of products is less than 10,000 yuan; the average price of 65% of products is concentrated in the range of 10,000 to 50,000 yuan, of which gold/inlay accounts for 24.3%/40.7% of total revenue; the average price of 19% of products is 50,000 to 250,000 yuan; and the average price of 5.7% of products exceeds 250,000 yuan.

Direct brand management, major stores in cutting-edge business districts, leading the way. Offline stores have adopted a pure direct brand management model. They have operated 32 self-owned themed stores in high-end shopping malls across the country, with a coverage rate of 80% in the top ten high-end shopping malls. Among them, the number of stores in first-tier and new first-tier cities accounts for 80% (81% of revenue). The efficiency of same-store stores increased rapidly under high-quality traffic operation. The average revenue of a single store in 2023 reached 106 million yuan, far exceeding the full year level of 2022. Among them, the total revenue ratio of the top five stores reached 39%, and the operating floor efficiency of excellent single stores was about 440,000 yuan per square meter/month. Currently, the gross margin of newly established stores is as high as 42%. The average initial break-even period is only 1 month, and the cash flow payback period is only 5 months. Single store revenue leads the industry's brands.

Future plans: High-tier cities will continue to penetrate, and overseas exhibition stores will open up international space. Future 1) Channel: In the next two years, the brand plans to open 8 new self-operated stores in the Mainland, including 4/4 stores on 24/25; 2) Brand: Strengthen brand strategy management and increase brand awareness through multiple channels; 3) Product: optimize product production processes, enhance product development capabilities, continue to promote innovation, and promote iterative product optimization.

Risk warning: gold price fluctuations, weak terminal consumption, increased industry competition, brand image risk, supply chain management risk