Zhou Dasheng's jewellery industry's winter gross profit margin is 30%.

Editor of China Economic Net: On April 27, Zhou Dasheng Jewelry Co., Ltd. (hereinafter referred to as “Zhou Dasheng”) officially landed on the Shenzhen Stock Exchange for listing on the small and medium-sized board, stock code: 002867. The company is engaged in the design, promotion and chain operation of “Zhou Dasheng” brand jewellery. It is one of the largest jewellery brand operators in China. “Zhou Dasheng” is the leading brand of diamond jewelry in the middle and high-end mainstream market in China. The main products include diamond inlaid jewelry and plain gold jewelry. Zhou Dasheng's net proceeds of RMB 146,044,800 were used for marketing service platform construction projects, R&D and design center construction projects, information systems and e-commerce platform construction projects, and supplemented with working capital related to the main business.

According to public information, on November 16, 2016, Chow Tai Sang released the latest prospectus. The first application was approved on March 15, 2017. On April 18, Zhou Dasheng opened the subscription, the purchase code: 002867, the purchase price: 19.92 yuan, the single account purchase limit of 21500 shares, the purchase amount of 500 shares multiple times. The lead underwriter is GF Securities. The number of shares issued this time was 76.85 million shares. The final number of online issuances was 691.15 million shares, accounting for 90% of the total issuance. The issue price is RMB 19.92 per share, and the price-earnings ratio is 22.99 times. More than 138,000 shares were abandoned by investors, of which online investors abandoned 129,031 shares and offline investors abandoned 8,982 shares. The final rate of online issuance is 0.0426557160%. From the stock price trend, since the listing on April 27, Zhou Dasheng has been trading for five consecutive trading days, and on May 5, he opened a daily limit. As of May 12, the stock closed at 36.95 yuan.

According to the latest prospectus, in 2011, 2012, 2013, 2014, 2015, 2016, the company realized operating income of 1,827,169,900 yuan, 2,096,787,800 yuan, 2,673,342,700 yuan, 2,663,382,300 yuan, 2,272,026,600 yuan and 290,180.13 respectively. Ten thousand yuan. The net profit was 234,021,700 yuan, 281,393,000 yuan, 24,463,500 yuan, 324,464,200 yuan, 35,307,100 yuan, and 42,667,300 yuan. The balance of accounts receivable was RMB 65.529 million, RMB 53.451 million, RMB 88.819 million, RMB 84.847 million, RMB 88.928 million and RMB 74.552 million. The turnover rate of accounts receivable (times) was 11.56, 35.26, 37.69, 30.84, 31.66, 35.64. The net inventory value was 797,246,600 yuan, 1,12,561,353,000 yuan, 1,18,570,100 yuan, 1,541,390,400 yuan, 141,119,900 yuan, and 1,601,903,500 yuan. The inventory turnover rate (times) were 1.89, 1.51, 1.69, 1.33, 1.23, 1.24. From 2011 to 2016, the gross profit margin of the company's main business was 28.03%, 29.38%, 24.91%, 29.71%, 30.69%, 32.84, respectively. %.

The company expects operating income in the first quarter of 2017 to be approximately 773.35 million yuan to 813.5 million yuan, an increase of 13.73% to 19.62% over the same period of the previous year; net profit attributable to owners of the parent company is approximately 117,231,700 yuan to 127,102,200 yuan. Compared with the same period of last year, the growth rate was 3.38% to 13.16%; after deducting non-recurring gains and losses, the net profit attributable to the owner of the parent company was approximately RMB 11,392,600 to RMB 12,485,210, an increase of 4.19% to 14.18% over the same period of the previous year ( The relevant financial data is forecasted by the company's financial department and has not been audited by the auditing agency and does not constitute a profit forecast.

The prospectus also shows that the actual dividend distribution of the company is: In June 2013, the company distributed a cash dividend of 3.2 yuan (including tax) to every 10 shares of all shareholders, and a total cash dividend of RMB 128.32 million. In April 2014, the company distributed a cash dividend of 5 yuan (including tax) to every 10 shares of all shareholders, and a total of 205 million yuan of cash dividends were distributed. In May 2015, the company distributed a cash dividend of 5 yuan (including tax) to every 10 shares of all shareholders, and a total of 200,500,000 yuan of cash dividends were distributed. In June 2016, the company distributed a cash dividend of 6 yuan (including tax) to every 10 shares of all shareholders, and a total of 246 million yuan of cash dividends were distributed. Calculated from the above data, the company's dividend for the first four years of listing was 770 million yuan.

According to the "Central Broadcasting Network" report, in recent years, the jewelry industry has grown at a rate of more than double digits. However, in 2014, the industry turned a corner, the jewelry industry as a whole declined, and the market began to supply surplus. According to incomplete statistics, the trading volume of the jewelry industry in the first half of the year reached 215 billion yuan, down 7.2% year-on-year. The industry believes that this represents the status quo of the entire Chinese jewelry industry to a certain extent, and the Chinese gold jewelry market seems to have entered the cold winter period. The most direct manifestation of the "cold" of the jewelry market is the decline in purchasing power. The "Economic Observer" reported that the domestic jewellery industry market has been sluggish in the past two years, and the so-called "cold winter" situation has not changed.

According to the "Beijing Business Daily" report, Zhou Dasheng official website said that the company opened its first store in 1999. In contrast, Zhou Dasheng's brand history is slightly "innocent", but with the joining model, Zhou Dasheng has countered his peers. Relevant information shows that Zhou Dasheng's franchise business accounts for about 50% of the company's main business. In 2015, Zhou Dasheng's single-job service sales revenue reached 300 million yuan. In the first half of 2016, Zhou Dasheng received over 700 million yuan in revenue from franchise stores. According to industry insiders, joining can achieve the goal of rapid expansion for brand owners, and at the same time, it can also establish a brand image, but blind expansion will cause the company to manage omissions and damage the brand image, which is counterproductive.

According to the "Securities Market Red Weekly" report, the prospectus disclosed that Zhou Dasheng plans to raise 1.46 billion yuan this time, mainly for 4 projects, of which the marketing service platform construction project plans to raise 969 million yuan, and the R&D design center construction project needs More than 61 million yuan, the information system and e-commerce platform construction project gives a plan of 130 million yuan, and the other 300 million yuan is used to supplement the working capital related to the main business. In the actual operation of the company, the number of self-operated stores and single store revenues have shrunk for several consecutive years, indicating that Zhou Dasheng’s business strategy in recent years has been contraction rather than expansion, but now the company has raised a large amount of funds for the substantial increase of self-operated stores. Quantity, this approach is very different from the company's business attitude in the past two years. Is the jewelry industry already beginning to enter the spring? In addition, Chow Tai Sang does not carry out product production and processing, and its production and processing business relies on commissioning external manufacturers to complete, which also brings certain risks.

According to the "Investor News" report, according to the prospectus, since 2013, Zhou Dasheng's revenue has not made much progress. From 2013 to the first half of 2016, the revenue was 2.678 billion yuan, 2.663 billion yuan, 27.29. 100 million yuan and 1.347 billion yuan. However, in comparison, Zhou Dasheng’s gross profit figure is very “good looking”. Regarding the phenomenon that gross profit margin is too “prominent” in the same industry, Zhou Dasheng also explained in the prospectus that it is because of the difference in business structure and product type that “it is only operating jewelry products including plain gold jewelry and inlaid jewelry. In addition to the gold and jewellery sales business, there are other businesses in the main business of other listed companies in the same industry, and there are differences in business composition."

According to the "China Business News" report, Zhou Zongwen and Zhou Huazhen and his wife indirectly controlled 78.50% of the company's shares through Zhou's investment, Jindayuan and Taiyou Investment, and they were absolutely controlling. In the industry's view, the high concentration of equity is the risk that Zhou Dasheng faces. There are many companies in the jewelry industry that have the surname "Week". In addition to Zhou Dasheng, there are also Chow Sang Sang and Chow Tai Fook. There are too many brands in the jewelry industry to start with the week. This is a very strange and abnormal phenomenon. The industry believes that many brands are struggling when they start to develop. From the registration time, Zhou Dasheng does have the suspicion of opportunistic. At the same time, the reporter noted that Zhou Dasheng still has many unfinished cases in registering trademark rights, patent rights and copyrights.

According to the "Beijing News" report, in 2013, "CCTV 3? 15 party" exposed Zhou Dasheng's product gold adulteration, and temporarily pushed it into the whirlpool of public opinion. According to media reports, after being exposed by CCTV, Zhou Dasheng’s gold products in Beijing, Langfang and Nanjing were taken down.

In response to the above situation, China Economic Net interviewed Zhou Dasheng, Secretary of the Board of Directors, and did not receive a reply as of the time of publication.

The company focuses on jewellery design and has permanent residency in New Zealand.

According to the latest prospectus, the company is engaged in the design, promotion and chain operation of “Zhou Dasheng” brand jewellery, and is one of the largest jewellery brand operators in China. “Zhou Dasheng” is the leading brand of diamond jewelry in the middle and high-end mainstream market in China. The main products include diamond inlaid jewelry and plain gold jewelry.

The company adopts light assets and integrated operation-oriented business strategies, focusing on brand operation, channel management, product development and supply chain integration, continuously improving brand image and influence, and realizing rapid development of the company. As of December 31, 2016, the company had 294 self-operated stores and 2,162 franchise stores.

Zhou's investment holds 67.50% of the company's shares and is the controlling shareholder of the company. Zhou Zongwen and Zhou Huazhen and his wife indirectly controlled 78.50% of the company's shares through Zhou's investment, Jindayuan and Taiyou Investment, and they were the actual controllers of the company. Zhou Zongwen, Chinese nationality, New Zealand permanent residency. Zhou Huazhen, Chinese nationality, New Zealand permanent residency.

According to the National Economic Industry Classification, the company is currently engaged in the jewelry retail industry, and its administrative department is the Jewelry and Jade Jewelry Management Center of the Ministry of Land and Resources. The Jewelry and Jade Jewelry Management Center of the Ministry of Land and Resources was established in 1992. Its main functions are the identification, research, teaching, evaluation, media promotion and vocational skills appraisal of jewellery and jade.

The net proceeds of the company's fundraising amounted to RMB 1,464,418,800 for the marketing service platform construction project, R&D and design center construction project, information system and e-commerce platform construction project, and supplemented the working capital related to the main business.

The number of self-operated stores has decreased year by year, and the sales of single stores have decreased year by year.

According to the website of the China Securities Regulatory Commission, on March 15, 2017, the Board of Directors of the Board of Directors made a number of inquiries to Zhou Dasheng in the announcement of the results of the 38th meeting in 2017.

1. Please issue the representative of the issuer to combine the management and control capabilities of the franchisee, the operation ability of the brand and the industry status of the jewellery design, and explain whether the issuer's franchise model and the corresponding franchise management fee and the brand usage fee's gross profit structure account for the future. Sustainability and adequate risk disclosure. Please sponsor the representative to explain the verification situation, and combine the sample of franchise stores in different regions, different store opening times and different turnover scales to explain the income, cost and gross profit of the single store, and further analyze the commercial rationality and issuer of the franchise sales model. The appropriateness and sustainability of the initial fee, affiliate management fee and brand usage fee.

2. The issuer's representative is requested to further explain: (1) the specific management mode and management of the issuer's import, sale and deposit of the franchisee; whether the franchisee's import, sales and deposit at the end of each reporting period are abnormal; The main reason for the withdrawal of franchisees in each year, the withdrawal of franchisees' handling of goods; the internal control degree of franchisee management and the effectiveness of its implementation during the reporting period; (2) During the reporting period, the number of self-operated stores of the issuers decreased year by year. In the case of single-store sales decline year by year, whether the main business model of the reporting period has undergone major changes, whether the proportion of franchisees will continue to rise in the future, and whether relevant information disclosure and risk disclosure are sufficient. Please sponsor the representative to further explain the verification and conclusions.

3. The issuer's representative is requested to further explain: (1) the issuer's inventory amount at the end of each reporting period and the specific reasons for the relatively large proportion, combined with the industry characteristics, the issuer's business model, and the inventory of other comparable listed companies in the same industry, analysis Whether it is reasonable; (2) the reason why the inventory turnover rate continued to decline during the reporting period and was significantly lower than the level of the same industry and its rationality; (3) the issuer's business model and product market situation, etc. Whether the provision for the preparation is sufficient and whether the relevant risks have been fully indicated. Please sponsor the representative to issue a verification opinion.

In addition, on November 16, 2016, the CSRC's review committee also made a lot of inquiries to Zhou Dasheng in the feedback. The issuer and the sponsor institution shall be classified according to the franchise store and the self-operated store, and disclose the details of the new store opening and closing of the store during the reporting period, the above-mentioned store operating income and profit, the new store performance in each period, and the closing of the store. Reasons; please ask the issuer to explain the situation in which the store's shops in each period of the report period failed to be renewed, or the default occurred, and the relevant proportion.

Please refer to the “Management Discussion and Analysis” section of the prospectus for quantitative analysis and disclosure of various influencing factors: (1) The reason for the change in the gross profit margin of the sub-model during the reporting period; (2) The issuer’s gross profit margin is higher than the average level of listed companies in the same industry. s reason. The sponsor and the reporting accountant are invited to comment on the above.

Please refer to the “Management Discussion and Analysis” section of the prospectus: (1) Combine the franchisee's ordering model and the report period during the reporting period to further analyze and disclose the reasons for the changes in the inventory balance of the issuer during the reporting period. The actual situation of the issuer; (2) The issuer is requested to explain the specific method for the inventory and impairment of the inventory, whether it has been consistently implemented during the reporting period, and whether the impairment provision is sufficient; (3) Further analysis and disclosure of the combined outsourcing production situation Reasons for changes in the balance of processing materials outside the period; (4) Please compare the differences in inventory composition and turnover ratio between the issuer and the listed companies in the same industry and analyze the reasons for the differences. The sponsor institution and the reporting accountant are invited to comment on the above contents, explaining the verification procedures and evidence obtained.

Join the fast-selling "small factory" OEM brand

According to the "Beijing Business Daily" report, the prospectus shows that as of June 30, 2016, the company has 2,288 marketing terminal stores nationwide, including 1994 franchise stores and 294 self-operated stores. It is reported that Chow Tai Fook was founded in 1929 and Chow Sang Sang was founded in 1934. According to Zhou Dasheng's official website, the company opened its first store in 1999. In contrast, Zhou Dasheng's brand history is slightly "innocent", but with the joining model, Zhou Dasheng has countered his peers. Relevant information shows that Zhou Dasheng's franchise business accounts for about 50% of the company's main business. In 2015, Zhou Dasheng's single-job service sales revenue reached 300 million yuan. In the first half of 2016, Zhou Dasheng received over 700 million yuan in revenue from franchise stores.

In contrast, the jewellery brands that have a long history have slowed down the store in the case of a slowdown in the retail industry, or closed the store. As of December 31, 2016, Chow Sang Sang had a total of 374 stores, and 47 new stores opened during the period. In the first half of 2015, 10 stores in the Mainland were closed. Huang Shaoji, managing director of Chow Tai Fook Group, also publicly stated that it plans to close 5-6 stores this year. Lai Yang, a special invited expert of the Beijing Business Research Institute and executive vice president of the Beijing Business Economics Association, believes that joining is a major trend in the future. The proportion of franchise stores is getting higher and higher, but the cost of joining is greatly reduced. How to ensure the management level becomes a franchise The biggest problem of business.

The object is extremely counter-productive, and it is a franchise that the brand merchants quickly withdraw funds. Due to poor quality and other issues, they have repeatedly accepted the rigorous test of the market. Zhou Dasheng wrote in the risk warning in the prospectus submitted to the CSRC that the company continued to strengthen channel management, but if there is a delay in store management in the future, it will adversely affect the brand image.

Yao Liming, director of the research department of the China Business Economic Research Center, said that joining can achieve the goal of rapid expansion for brand owners, and at the same time can establish a brand image, but blind expansion will cause the company to manage omissions and damage the brand image, which is counterproductive.

According to the "Securities Market Red Weekly" report, the prospectus disclosed that Zhou Dasheng does not carry out product production and processing, and its production and processing business relies on commissioning external manufacturers to complete, which also brings certain risks. Although Zhou Dasheng’s risk warning is clear, from the actual implementation, Zhou Dasheng’s so-called “strict screening” standard is debatable, and the size of the chosen subcontractor does not seem to be as large as expected. According to the prospectus, Guangzhou Jiahuiyi Jewelry Co., Ltd., one of the top five outsourcing manufacturers, has been an important subcontractor of Zhou Dasheng during the reporting period. Zhou Dasheng has paid millions of yuan in processing fees to him every year. Judging from the registration information of Guangzhou Jiahui Art, the company was established in 2010, and the legal representative is Gu Guangxian. The main business of the initial establishment was the manufacture of jewellery and related articles, with a registered capital of only 100,000 yuan.

The rationality of fundraising projects is debatable

According to the "Securities Market Red Weekly" report, the prospectus disclosed that Zhou Dasheng plans to raise 1.46 billion yuan this time, mainly for 4 projects, of which the marketing service platform construction project plans to raise 969 million yuan, and the R&D design center construction project needs More than 61 million yuan, the information system and e-commerce platform construction project gives a plan of 130 million yuan, while the other 300 million yuan is used to supplement the working capital related to the main business.

Obviously, the most cost-intensive project among the four projects is the “Marketing Service Platform Construction Project”. According to the plan, the engineering cost of the project is 65.62 million yuan, the fixed assets purchase is 54.68 million yuan, the other asset costs are 5352.01 million yuan, the reserve fee is about 17738.27 million yuan, and the working capital needs 778 million yuan. According to the prospectus, “After the completion of the project, Zhou Dasheng will add 120 self-operated stores and 6 regional marketing service centers: new self-operated stores will be distributed in 21 provinces and 36 cities across the country, and regional marketing service centers will be located in Beijing. Six cities in Xi'an, Chengdu, Zhengzhou, Nanjing and Shenyang. From the perspective of the company's attention, it must be that Zhou Dasheng has developed in the past two years. The company has experienced rapid development and its own self-operated store layout is obviously insufficient. Is it really like this?

According to the prospectus, during the period from 2013 to the end of June 2016, the number of self-operated stores of Zhou Dasheng was 339, 339, 299 and 294 respectively. In terms of quantitative changes, Zhou Dasheng’s self-operated stores showed shrinkage in the past two years. phenomenon. The reporter found that while the number of self-operated stores decreased, the average single store income of Zhou Dasheng's self-operated stores was also decreasing. During the reporting period, the average income of its single store was 4,227,700 yuan, 3,721,100 yuan, 3,754,500 yuan and 1,643,600 yuan respectively.

Since the company's actual operations, the number of self-operated stores and single store revenues have shrunk for several consecutive years, indicating that Zhou Dasheng's business strategy in recent years has been contraction rather than expansion, but now the company has raised a large amount of funds for the substantial increase of self-operated stores. Quantity, this approach is very different from the company's business attitude in the past two years. Is the jewelry industry already beginning to enter the spring? Since it is possible to predict the arrival of the jewelry industry in the spring, and actively expand the number of self-operated stores can bring high benefits, why in the first two years or at least in the first half of this year, why did Zhou Dasheng not take out funds in advance to expand accordingly? What?

In addition, in this fundraising project, Zhou Dasheng also plans to invest 130 million yuan for the "information system and e-commerce platform construction project." The company stated in the prospectus that “the company officially established an innovation operation center in 2014 to be responsible for online sales. The company mainly faces the end consumers through the way of opening flagship stores through third-party platforms such as Tmall, Jingdong, Amazon and Dangdang. Selling products by online retailing." "In order to fully seize the opportunities of mobile e-commerce development, the company took the lead in deploying mobile e-commerce through mobile phone Taobao, WeChat's Jingdong shopping channel."

Judging from the sales situation of e-commerce channels, during the reporting period, Zhou Dasheng's e-commerce sales revenue did increase rapidly, reaching 1,734,900 yuan, 22,415,600 yuan, 12,259,900 yuan and 95,571,800 yuan respectively. Among them, Jingdong flagship store is its second largest e-commerce platform. In the corresponding cycle, its sales amount is 199,000 yuan, 4,260,600 yuan, 160.999 million yuan and 141.885 million yuan respectively. The sales amount has shown a significant growth trend.

However, not long ago, it was reported that Zhou Dasheng’s products had been removed from Jingdong and cleared from the Jingdong platform. In response to this news, "Red Weekly" reporters tried to search for Zhou Dasheng's products in Jingdong Mall, but the results were not found. As for the reason why Zhou Dasheng’s products were retired by Jingdong, there were media reports that Zhou Dasheng had signed a “Double 11” activity memo with Jingdong. In the 8 days and 8 categories of publicity that Jingdong publicized, Zhou Dasheng was also on the list. However, Zhou Dasheng later It is proposed to withdraw from the Jingdong "Ace Hegemony" campaign, as well as all official activities of Jingdong "Double 11". Since then, the two sides have not reached an agreement on this matter, so they were withdrawn by Jing Dongqing. In this case, as one of the important projects for the use of funds raised, is the original “information system and e-commerce platform construction” program in line with the needs of enterprise development? Do you need to re-edit it?

The gross profit margin of “being high and low” far exceeds the industry average

Image source: November 16, 2016 prospectus

Image source: Securities Market Red Weekly

According to the company's November 16, 2016 prospectus and the latest prospectus, the gross profit margin of the company's main business in 2011-2016 was 28.03%, 29.38%, 24.91%, 29.71%, 30.69%, 32.84%.

According to the "Investor News" report, according to the prospectus, since 2013, Zhou Dasheng's revenue has not made much progress. From 2013 to the first half of 2016, the revenue was 2.678 billion yuan, 2.663 billion yuan, 27.29. 100 million yuan and 1.347 billion yuan. However, in comparison, Zhou Dasheng’s gross profit figure is very “good looking”. According to the prospectus, since 2013, the gross profit margin of Zhou Dasheng's main business has increased year by year, 24.91%, 29.71%, 30.69% and 33.60% respectively, but at the same time, the top nine companies in the jewelry industry (including Lao Fengxiang, Dongfang) Jin Hao and so on, Zhou Dasheng's market share ranked third (4.3%), the average gross profit margin was only 9.94%, 12.68%, 13.33% and 15.95%.

Regarding the phenomenon that gross profit margin is too “prominent” in the same industry, Zhou Dasheng also explained in the prospectus that it is because of the difference in business structure and product type that “it is only operating jewelry products including plain gold jewelry and inlaid jewelry. In addition to the gold and jewellery sales business, there are other businesses in the main business of other listed companies in the same industry, and there are differences in business composition."

Image source: Securities Market Red Weekly

According to the "Securities Market Red Weekly" report, during the reporting period, the gross profit margin of Zhou Dasheng's prime products was 9.61%, 14.14%, 13.96% and 20.50%, respectively, while several companies in the same industry were prime products. The average value is only 4.63%, 6.46%, 6.87% and 9.05%. Obviously, the gross profit margin of Chow Tai Sang's gold products is much higher than other companies in the same industry.

According to the disclosure information of the prospectus, Zhou Dasheng's main business is the design, promotion and chain operation of “Zhou Dasheng” brand jewellery. It does not involve production and processing. The products such as gold jewelry and inlaid jewelry mainly pass the products of the subcontracting manufacturers. Processing. What is strange is that in the context of this lack of processing profit and the basic price of raw materials, what is the advantage of the gross profit margin of Chow Tai Sang's products in the same category as other listed companies in the same industry?

It is also strange that, when the gross profit margin of prime gold products is much higher than the average of the same industry, the gross profit margin of its mosaic jewelry is far lower than that of other companies in the same industry. According to the prospectus, during the reporting period, the gross profit margin of Zhou Dasheng's inlaid jewellery was 26.50%, 24.83%, 26.50% and 28.23%, respectively, while the average gross profit margin of the same industry companies, Oriental Jinluo, Chaohongji, Mingpai Jewelry and Cuihua Jewelry. They are 46.06%, 40.98%, 42.78% and 42.05%, respectively. For the phenomenon that the gross margin of mosaic jewelry is much lower than that of the same industry, Zhou Dasheng still interprets it as “the difference in business model”, but the basis for this explanation is there?

Jewelry industry enters the winter

According to the "Economic Observer" report, due to the influence of the domestic and international economic environment, the domestic jewelry industry market has been sluggish in the past two years, and the so-called "cold winter" situation has not changed. Dong Lisha, deputy general manager of Beijing Colorful Yunnan, said that in fact, after the overall economic slowdown in recent years, the entire jewelry industry is also a slowing trend, and China is an engine of the entire world economy, so in this slowdown In the process, China's jewelry industry can not be excluded, its entire development law is also in line with the international law of global economic development.

According to the "Central Broadcasting Network" report, in recent years, the jewelry industry has grown at a rate of more than double digits. However, in 2014, the industry turned a corner, the jewelry industry as a whole declined, and the market began to supply surplus. According to incomplete statistics, the trading volume of the jewelry industry in the first half of the year reached 215 billion yuan, down 7.2% year-on-year. The industry believes that this represents the status quo of the entire Chinese jewelry industry to a certain extent, and the Chinese gold jewelry market seems to have entered the cold winter period. The most direct manifestation of the "cold" of the jewelry market is the decline in purchasing power.

Some industry experts said that the current jewelry industry in China is not perfect, the market is complex, and the problems are more prominent. For example, the profit growth of enterprises is greatly affected by the raw material market; jewelry enterprises still belong to the “shop-style” pattern rather than the complete industrial chain pattern.

According to "Sina.com" report, in this product surplus, the end of official gifts, industrial transformation and upgrading of the weak jewelry industry corner, jewelry companies have never had a torment. Even if the companies with different scales feel different, the jewelry products with different types and varieties are uneven, but everyone generally feels the downturn in sales. Business failure! The boss is running! The factory is closed! One news of the collapse of the tide continued to emerge. I saw that the jeweler’s heart hurts and the heart is blocked. Many jewellery manufacturers have become restless. A little bit of wind and grass is easy to make them nervous, for fear that the hard-earned money will be difficult to recover in a year. I am afraid that it is difficult to have money to delay this year, and the shortage of funds will become more prominent at the end of 2015.

It is understood that China's jewelry industry is currently less concentrated, with 18,000 jewelry retail enterprises across the country, with a total of 64,000 stores. Most companies are small and their brand awareness is not high. Moreover, the domestic jewellery brand market is highly regional, showing that the domestic jewellery industry is still in the initial stage of development, and the enterprises leading the industry have not yet formed. The jewelry industry belongs to the fund cheats industry, which requires a lot of money and has an urgent need for financial services. However, it is difficult for the jewellery enterprises to make a difficult loan from the bank.

Nearly 800 million dividends in the four years before listing

According to the old prospectus (November 16, 2016), in October 2009, Zhoushi Investment, Jin Dayuan and Aurora Investment Limited signed the “Calculation Co., Ltd. Capital Increase Agreement” and the “Joint Venture Zhou Dasheng Jewelry Co., Ltd. Contract”. The net profit generated by the company's operating income from the effective date of the agreement to the date of the transaction is owned by the original shareholders (Zhou's Investment, Jin Dayuan) and may be distributed to the original shareholders in accordance with relevant laws and regulations and corporate accounting standards. In September 2011, the fifth board of directors of the first board of directors of the company decided to pass the profit distribution plan, and agreed to accumulate a profit of 43,964,020.47 yuan from the net profit of the company's operating income from the effective date of the agreement to the transaction date. It is distributed to the original shareholders in cash and distributed according to the original shareholder equity ratio.

In June 2013, the company held the 2012 Annual General Meeting of Shareholders. The meeting reviewed and approved a number of proposals including the “Proposal on Profit Distribution of the Company in 2012” (hereinafter referred to as “profit distribution proposal”). According to the profit distribution proposal, The company distributed a cash dividend of 3.2 yuan (including tax) to every 10 shares of all shareholders, and distributed a total of 128.32 million yuan in cash dividends.

According to the latest prospectus, during the reporting period of 2014-2016, the company has made three dividend distributions, all of which are cash dividends. The details are as follows:

1. In April 2014, the 2013 Annual General Meeting of Shareholders reviewed and approved the “Proposal on Profit Distribution in 2013”, and agreed that the company will distribute cash dividends of RMB 5 (including tax) to every 10 shares of all shareholders, and a total of RMB 200.5 million of cash dividends will be distributed.

2. In May 2015, the 2014 Annual General Meeting of Shareholders reviewed and approved the “2014 Profit Distribution Plan”, and agreed that the company would distribute a cash dividend of RMB 5 (including tax) to every 10 shares of all shareholders, and a total of RMB 200.5 million of cash dividends will be distributed.

3. In June 2016, the 2015 Annual General Meeting of Shareholders reviewed and approved the “2015 Profit Distribution Plan”, and agreed to distribute a cash dividend of RMB 6 (including tax) to every 10 shares of all shareholders, and a total of 260.06 million yuan of cash dividends were distributed.

Calculated from the above data, the company's dividend for the first four years of listing was 770 million yuan.

The average selling price of prime gold products declined in 2015 under self-operated mode

Image source: Latest prospectus

According to the latest prospectus, the average selling price of prime gold products in 2015 continued to decline with the decline of gold prices in the mode of self-operated (excluding e-commerce). In 2015, the gold price rebounded and self-operated (excluding electricity). The average selling price of prime gold products under the model is basically stable compared to 2015.

During the reporting period, the average price of inlaid products under self-operated (excluding e-commerce) and franchise models changed less. The average price of inlaid products in e-commerce mode fluctuated greatly, mainly due to the sales of prime gold products under the e-commerce model. The sales volume of inlaid products was extremely small (less than 5,000 sales in each period of the reporting period). The difference in the structure of the sales product will have a greater impact on the average unit price.

According to the company, in terms of product pricing, the company's prime gold products, inlaid products and gold, diamonds and other raw materials are highly correlated. Among them, the daily retail price of the company's gold jewelry is linked with the gold listing price of the gold exchange; the inlaid jewelry adopts the cost-plus pricing method, and the diamond cost price has a greater impact on the final price of the inlaid product. During the reporting period, due to factors such as the international economic and political situation, changes in market supply and demand, and inflation expectations, prices of raw materials such as diamonds and gold fluctuated significantly.

In the future, if the prices of raw materials such as gold, platinum, diamonds and the like fluctuate greatly, on the one hand, it will affect consumers' judgment on the price trend of vegetarian gold and inlaid jewelry, which in turn will affect their demand for jewelry products; on the other hand, the company also has raw materials. The risk of unstable gross profit margin caused by price fluctuations has an adverse impact on the company's operating results.

Intellectual property disputes

According to the "China Business News" report, there are many companies in the jewelry industry that have the surname "Week". In addition to Zhou Dasheng, there are also Chow Sang Sang and Chow Tai Fook.

Professor Zhang Tingyuan from the Intellectual Property Research Institute of Jincheng College of Sichuan University said in an interview with the media: The jewelry industry has too many brands to start with the week. This is a very strange and abnormal phenomenon. “A lot of brands are struggling when they start to develop. From the registration time, Zhou Dasheng really has the suspicion of opportunism.” Zhang Peiying said. In addition, Zhou Dasheng pointed out in the risk warning of the prospectus that the company is facing the risk of copying styles and counterfeiting by other jewelers in the same industry. At the same time, the reporter noted that Zhou Dasheng still has many unfinished cases in registering trademark rights, patent rights and copyrights.

However, in addition to his infringement of his copyright as a plaintiff, Zhou Dasheng was also accused of infringing the copyright of others. For example, Guangdong Original Power Culture Communication Co., Ltd. sued Zhou Dasheng and Dongping Wanfu Jewelry Gold Store (as co-defendants) and requested the defendant to immediately stop the copyright infringement of the series of works of the Pleasant Goat and Big Big Wolf, and compensate the plaintiff for economic losses and stop the infringement. The reasonable expenses paid amounted to 3 million yuan. This case has not yet been heard.

"As a listed company, such as infringement of the intellectual property rights of others, will result in being required to stop infringement, off-the-shelf products, apology, and compensation for high losses, severely fined, or criminally liable. But if you The infringement of intellectual property rights by others may also lead to a decline in the reputation of the company's brand (known trademarks or commodities), and even reduce or be deprived of market share, thus causing enterprises to face difficulties. Enterprises should pay attention to such disputes.” Shaanxi is on the verge of Zhang Chunlin, an intellectual property lawyer at a law firm, said.

In addition, in the industry's view, the high concentration of equity is another risk that Zhou Dasheng faces. According to the prospectus, before the issuance, Zhou Dasheng’s four shareholders were: Shenzhen Zhoushi Investment Co., Ltd. (hereinafter referred to as “Zhou’s Investment”), Shenzhen Jindayuan Investment Co., Ltd. (hereinafter referred to as “Jindayuan”), Shenzhen Taiyou Investment Partnership (Limited Partnership) (hereinafter referred to as “Taiyou Investment”) and Aurora Investment Limited. Among them, the legal representative of Zhou's investment is Zhou Zongwen, holding 90% of the shares, and the remaining 10% of the shares are held by his wife Zhou Huazhen. The legal representative of Jin Dayuan is Zhou Feiming, who is the son of Zhou Zongwen and Zhou Huazhen. Zhou Feiming holds 20% in Jin Dayuan and Zhou Zongwen holds 80%. The executive partner of Taiyou Investment is Zhou Huazhen and holds 31.86%.

Zhou Zongwen and Zhou Huazhen and his wife indirectly controlled 78.50% of the company's shares through Zhou's investment, Jindayuan and Taiyou Investment, and they were absolutely controlling. If the shares of his son Zhou Feiming are added, the Zhou family will indirectly hold 76.96% of the shares of Chow Tai Sang. In addition, Zhou Zongwen, Zhou Huazhen, and Zhou Feiming also have permanent residency in New Zealand, and the three are the chairman and general manager of the company; directors and deputy general managers; directors and deputy general managers.

It can be seen that the company has actual controller control risks. "First, the high concentration of equity tends to lead to increased control of the controlling shareholder, which can promote the convergence of the interests of senior executives and controlling shareholders to a certain extent, resulting in the lack of independence of independent directors, supervisors and even intermediaries. The highly concentrated ownership structure will weaken the role of corporate risk aversion, etc., the famous economist Song Qinghui told reporters.

Was beaten by CCTV 3.15

据《新京报》报道， 2012年底，周大生就接受了广发证券的上市辅导，计划上市。不过，2013年，“央视3·15晚会”曝光周大生产品黄金掺假，一时将其推入舆论漩涡之中。

当晚，央视报道，河北省廊坊市周大生黄金专柜的销售人员保证，该处卖的黄金首饰都是千足金的纯黄金制成的。根据国家规定，含金量千分数不小于999的称为千足金，是首饰成色命名中最高值。不过当时央视记者发现，其购买的周大生千足金的黄金项链，经国家珠宝玉石质量监督检测中心检测显示，该黄金首饰的含金量为994.4‰，杂质成分中，铱的含量大于1.4‰。

在元素周期表中，铱与黄金紧挨着，密度与黄金非常接近，但价格只有黄金的五到十分之一。央视称，悬殊的价格诱使一些商家以铱冒充黄金。

报道发出后，周大生在官方微博上回应：全面复查黄金链，若存问题将退款退货。周大生称，初步查明该批次产品来源于一个供应商，将对这批产品予以全面复检。如果复检结果证明存在问题，承诺会严格按照国家规定给予妥善解决，包括退款和换货。该次事件中，周大生召回了该批次产品共148件。

不过，几日后，周大生回应称，截至2013年3月20日，深圳、重庆、济南、江西、福建、哈尔滨等多地已公布检测结果，抽检的所有批次周大生产品100%合格。

对于此次“黄金掺假”事件，周大生的招股书中只提及一句话：“2013年度央视3·15晚会报道，公司某一加盟店的一件千足金产品黄金含量仅为99.44%，随后公司积极配合各地工商、质检部门进行全面复检和抽检工作，检测结果全部合格。”该事件最终不了了之。不过，据媒体报道，被央视曝光后，周大生在北京、廊坊、南京等地的黄金产品被撤下。