Sealand Securities: Initiates coverage on CHJ with "Overweight" rating, fashion jewelry continues rapid growth.

Guohai Securities research report points out that CHJ's fashion jewelry continues to grow rapidly, with profitability significantly improving. In 2026H1, the company achieved net profit attributable to parent of RMB 422 million, up 27.42% year-on-year, with profit growth notably faster than revenue. Fashion jewelry contributed to revenue growth, while traditional gold profitability continued to improve. Channel structure further tilted toward franchising, with a slower pace of store openings and greater emphasis on store quality. In the same period, the company's self-operated channel gross margin rose from 31.52% in the year-ago period to 44.86%. Despite a contraction in store count, profitability improved, consistent with the company's direction of optimizing store structure and enhancing operational quality. Overseas operations remain in an early expansion stage, with 3 new stores added in the first half, bringing the total number of overseas stores to 14 at period-end. The company's fashion jewelry business continues to grow, product mix optimization is expected to support profitability improvement, and steady expansion of franchise channels is expected to contribute to medium- to long-term growth. First coverage initiated with an "Accumulate" rating.