We are a Chinese heritage gold (古法黃金) jewelry brand accredited by the China Gold Association (中國黃金協會)*, epitomizing China’s intangible cultural heritage value and craftsmanship through our comprehensive product portfolio, with a market share in the heritage gold jewelry market and the gold jewelry market in China of 2.0% and 0.6%, respectively, in terms of revenue in 2023, according to Frost & Sullivan. During the Track Record Period, we derived a material portion of revenue from sales of self-designed heritage gold jewelry through our boutiques. We adopt a self-operation model for all our boutiques. As of the Latest Practicable Date, we self-operated 33 boutiques in reputable commercial centers in 14 cities across China, most of which were tier-one and new tier-one cities. We are dedicated to offering products that harmonize cultural and fashionable attributes, showcase assertive style, and demonstrate high quality, ranging from daily wear accessories to ornaments and vessels. We believe that our brand positioning, product theme and style, and sales network contributed to our success. Among the key brands in China’s gold jewelry market, we are the only brand that focuses on the design, manufacture and sale of heritage gold jewelry, according to Frost & Sullivan. Among all gold jewelry brands in China, we ranked first in terms of single-store sales in each of 2022 and 2023, according to Frost & Sullivan. In 2023, we further achieved significant growth. Our average revenue for 2023 per boutique that existed as of December 31, 2023 reached RMB93.9 million, exceeding twice the average revenue for 2022 per boutique that existed as of December 31, 2022.
As pure gold is soft, processing of pure gold, especially when embedding diamonds and gemstones onto the surface of pure gold, requires sophisticated craftsmanship. Unprofessional craftsmanship may cause pure gold to be bent, squeezed or deformed. Through years of dedication and commitment, we have promoted many major developments and advancements in China’s gold jewelry industry. Based on expert interviews and researches for public information conducted by Frost & Sullivan, founded in 2009 we were the first gold jewelry brand in China to promote the concept of heritage gold, the first to introduce diamond-inlaid pure gold jewelry, and the first to apply heat treatment of enamels (燒藍) to pure gold products. Our continuous offering of quality products have made Laopu Gold (老鋪黃金) a well- recognized brand among high net-worth individuals. According to the 2023 Hurun Supreme Brands — Chinese High Net-Worth Individuals’ Brand Preferences Report (《2023胡潤至尚優 品—中國高淨值人群品牌傾向報告》) released by the Hurun Research Institute (胡潤研究院) in March 2023, our brand was listed among the top ten jewelry brands preferred by high net-worth individuals, standing as one of the only two domestic jewelry brands.
Heritage gold has heralded a new product era in China’s gold jewelry industry. In recent years, the gold jewelry market has witnessed new opportunities for development. Driven by the rapid increase in consumer demand for high-quality products, heritage gold products have emerged as one of most promising and fastest-growing categories in the gold jewelry market. According to Frost & Sullivan, the market size for heritage gold jewelry in China, in terms of sales revenue, has grown from approximately RMB13.0 billion in 2018 to approximately RMB157.3 billion in 2023 at a CAGR of 64.6%, and is expected to reach approximately RMB421.4 billion by 2028 at a CAGR of 21.8%. With the transition of main consumer group to the younger generation, there is an increasing market demand for gold jewelry products with unique cultural and brand identity, and a sophisticated fashion sense. With our first-mover advantages in the heritage gold jewelry industry, dedication in product design and manufacture, continuing innovation in product research and development, and quality customer service offerings, we believe we are well-positioned to capture the huge growth of China’s heritage gold jewelry market.
We aspire to become an internationally renowned gold jewelry brand that stands as a beacon of classic craftsmanship, epitomizing China’s intangible cultural heritage value and craftsmanship. We draw inspiration from classic elements of the Chinese culture to develop products that elegantly combine traditional Chinese classical standards with modern aesthetics.
Sticking with our brand values of “classic (經典)”, “meticulous (極致)” and “timeless (傳世)”, we craft our jewelry with traditional handcrafting methods. Certain traditional technique we utilize, such as “filigree inlay” (花絲鑲嵌) and “gold and silver inlay” (金銀錯), are recognized as national-level intangible cultural heritage. We also make full use of the advantages of other heritage gold crafting techniques, such as investment casting (失蠟成型), free forging (摟胎), hammering (錘揲), carving (鏨刻), hollowing (鏤空), and heat treatment of enamels (燒藍). For more details, see Business section in this document. We prioritize originality, emphasizing product research, development, innovation and quality control. We continually launch new featured products to stay competitive in the market. As of the Latest Practicable Date, we created over 1,800 original product designs and held copyrights of over a thousand works. Our product mix caters to the diverse needs of consumers of different ages, including daily wear accessories, as well as stationary, daily use and decorative ornaments and vessels. Our certain products have driven industry development. For example, we introduced diamond-set pure gold jewelry products by the end of 2019, and according to Frost & Sullivan, we were the first in the gold jewelry industry to embed diamond in pure gold, changing the traditional standard of using K gold as the base material for diamond-set jewelry. In 2022, by utilizing traditional technique of heat treatment of enamels, we were the first in the industry to introduce pure gold enamel jewelry products, according to Frost & Sullivan.
We have established market presence in reputable commercial centers of tier-one and new tier-one cities in China. As of the Latest Practicable Date, we self-operated a total of 33 boutiques, all located in shopping malls with stringent entry requirements, such as SKP and MixC (萬象城). According to Frost & Sullivan, as of April 2024, we covered eight out of the top ten high-end shopping malls nationwide, ranking first among all domestic gold jewelry brands in terms of the coverage rate. We not only successfully entered into these shopping malls, but also achieved outstanding sales performance in them. For example, in 2023, our two boutiques located in Beijing SKP generated a total revenue of RMB335.8 million, achieving a monthly revenue per sq.m. of approximately RMB440,574. To put it in context, Beijing SKP is one of the world’s most productive shopping malls in terms of sales per sq.m., and its monthly sales per sq.m. in 2023 was approximately RMB17,740.6. With our high-quality brand identity, as well as the track records of our existing boutiques, we believe that we have gained a strong channel expansion capability, enabling us to systematically open new boutiques at coveted positions in reputable commercial centers with stringent entry requirements. For example, after the successful collaboration with Beijing SKP, we have established boutiques in other shopping malls of the SKP group, such as Xi’an SKP, Chengdu SKP, and DT51. Such win-win collaborations with top commercial centers achieves a virtuous cycle that continuously drives our growth. Moreover, our boutiques are themed around classical Chinese study room scenes to largely enhance customer shopping experience. Our premium boutique locations naturally attract high net-worth consumers that perfectly match with our brand positioning, and the premium environments of our boutiques serve as a testament to our brand identity. In addition, we also reach consumers nationwide through online channels, including our flagship stores on Tmall and JD.com, which are independent third-party e-commerce platforms, as well as our WeChat Mini Program that we developed to optimize our customer experience and increase our online sales.
We experienced significant growth during the Track Record Period. Our revenue increased from RMB1,264.6 million in 2021 to RMB1,294.2 million in 2022 despite the adverse impact from COVID-19, and further increased to RMB3,179.6 million in 2023, representing a CAGR of 58.6% from 2021 to 2023. We recorded a net profit of RMB113.9 million, RMB94.5 million and RMB416.3 million in 2021, 2022 and 2023, respectively.
In the future, we will adhere to strategic principles such as brand innovation, product internationalization, and global market expansion, enabling us to effectively capture growth opportunities in the gold and jewelry industry and further expand market share and brand influence.
Source: Laopu Gold (06181) Prospectus (IPO Date : 2024/06/20) |