Chow Tai Seng Jewellery Co., Ltd. (002867.SZ) has resolved its high-profile 210-million-yuan lawsuit, with the final compensation amounting to 2.78 million yuan—a far cry from initial fears. Additionally, the company’s frozen funds have been released.
On the evening of November 5, Chow Tai Seng announced that it received a *Civil Ruling* from the Luohu District People’s Court in Shenzhen, Guangdong, ordering the release of 70.249 million yuan in frozen bank account funds tied to the litigation. A lawyer from Wuhan noted that with the final judgment taking effect, the frozen assets under property preservation were legally unfrozen, marking a significant positive development for the company amid recent performance pressures.
In 2025, Chow Tai Seng’s struggles persisted. The company reported Q1–Q3 revenue of 6.772 billion yuan, down 37.35% year-on-year (YoY), while net profit attributable to shareholders rose 3.13% to 882 million yuan. Adjusted net profit (excluding non-recurring gains/losses) grew 1.85% to 853 million yuan.
Store data revealed a sharp decline in outlets over the past year: total terminal stores fell 10.7% (560 fewer), franchise stores dropped 12.51% (611 fewer), and self-operated stores increased 14.61% (51 more).
**Lawsuit Details** The 210-million-yuan contract dispute with Shenzhen Shuibeika Information Technology Co., Ltd. concluded with Chow Tai Seng compensating 2.78 million yuan (offset by a deposit of the same amount). Shuibeika had initially sought 211 million yuan but lost its appeal in the Shenzhen Intermediate People’s Court on October 20, 2025. Chow Tai Seng stated it had already provisioned for the 2.78-million-yuan receivable, so the ruling would not impact current or future profits.
The dispute stemmed from a 2022 collaboration on a mobile communications product, *5G·Beika* (later renamed *Chow Tai Seng·Beika*), which was terminated during preparation due to operational challenges. The company maintained it breached no contracts.
**Performance Pressures** In 2024, Chow Tai Seng’s revenue fell 14.73% to 13.891 billion yuan, with net profit down 23.25% to 1.01 billion yuan. The decline continued into 2025, attributed to volatile gold prices and weak consumer demand.
By product category, Q1–Q3 2025 saw: - **Inlaid jewelry**: 556 million yuan (-4.89% YoY), 8.22% of revenue. - **Plain gold**: 4.942 billion yuan (-44.44% YoY), 72.98% of revenue. - **Brand licensing fees**: 569 million yuan (+3.03% YoY).
By channel: - **Self-operated offline**: 1.342 billion yuan (-0.86% YoY), with inlaid jewelry sales up 67.23%. - **E-commerce**: 1.945 billion yuan (+17.68% YoY), driven by a 33.19% surge in gold sales. - **Franchise wholesale**: 3.345 billion yuan (-56.34% YoY), with gold wholesale plunging 64.58%.
As of Q3 2025, Chow Tai Seng operated 4,675 stores (4,275 franchises, 400 self-owned), reflecting its strategy to phase out underperforming outlets and expand self-operated networks in prime locations.
*Image: Visual China*
Comments