Morgan Stanley: Senior gold products are rapidly rising and optimistic about CHOW TAI FOOK (01929), giving LAOPU GOLD (06181) an "in sync with the market" rating for the first time.

Morgan Stanley released a research report stating that they have been cautious about the mainland jewelry market since mid-2023, but their recent consumer survey found that the rapid growth of gold jewelry is due to product upgrades, improving demand for gemstones, and a trend towards high-end products. This is beneficial for high-end local brands and foreign luxury brands to capture market share from mass market and unbranded jewelry. They upgraded CHOW TAI FOOK (01929) from "Market Perform" to "Outperform" with a target price of 10.5 Hong Kong dollars, up from 8.3 Hong Kong dollars; they also initiated coverage on LAOPU GOLD (06181) with a "Market Perform" rating and a target price of 555 Hong Kong dollars. The bank stated that the rapid rise of high-end gold products reflects consumers' willingness to pay a premium for quality craftsmanship and design. They expect more local brands to target this consumer group, with the most representative brands continuing to perform well. The bank ranked 18 domestic and foreign jewelry brands based on key jewelry purchasing criteria, with LAOPU GOLD, CHOW TAI FOOK Jewelry, Bulgari, and Cartier performing particularly well.