The "Double 11" shopping festival once again highlighted gold and jewelry as one of the most vibrant sectors. On the day of the event, domestic gold jewelry prices surged, with leading brands quoting prices exceeding RMB 1,300 per gram, marking a single-day increase of up to RMB 37. ZHOU LIU FU, a prominent local jewelry brand, stood out across major e-commerce platforms due to its strategic focus on online channels and gold product offerings. This presents an opportunity to analyze the company's undervalued position, with a fair target price of HKD 65—implying over 20% upside from current levels.
**Double 11 Performance: A Golden E-commerce Winner** Driven by "self-reward consumption" and "value preservation," the gold jewelry sector maintained strong growth. For instance, during livestream sales by top influencers like Li Jiaqi, gold bars sold out instantly, attracting over 10 million viewers. Notably, online gold purchases from tier-3 cities saw penetration rates spike to 48.6%. ZHOU LIU FU capitalized on this trend through its "heritage craftsmanship" and "national chic" branding, resonating with younger consumers. On Tmall, its flagship store ranked among the top jewelry sellers, while JD.com recorded rapid year-on-year sales growth. Crucially, gold products now account for over 50% of its e-commerce revenue—a structural shift that boosts overall sales, lifts gross margins, and demonstrates brand strength in supporting high-value online transactions.
**Valuation Insight: Why HKD 65 Is Justified** Despite recently surpassing HKD 50, ZHOU LIU FU's growth potential remains underappreciated. Based on financial projections and peer comparisons, a fair target of HKD 65 is derived using PE valuation: 1. **Earnings Base**: Brokerage forecasts suggest 2025 net profit of RMB 1.23–1.7 billion (EPS: RMB 2.8–3.8), with a midpoint EPS of RMB 3.3. 2. **Peer Multiples**: Comparable Hong Kong and A-share jewelry peers trade at 20–25x 2024 forward PE. Applying this range (EPS × PE) yields a target range of HKD 66–82.5, indicating significant upside from the current ~HKD 50 price.
In summary, ZHOU LIU FU's robust e-commerce momentum—validated by Double 11—and gold-driven profit optimization support a re-rating to HKD 65. For long-term investors, this may represent a compelling entry point.
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