Zhou Liufu Lufu Jewelry Rating Upgrades

Since the opening of the market in 2016, it has experienced two fuses, making most of the shareholders panic.

The old gold jewelry brand Zhou Dafu and Lufu jewellery, which are affected by the gold price, are also affected.

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Besides, the sales in the Spring Festival season are also not enough.

But something interesting is coming.

Although the retail value of Zhou Dafu fell 29% during the Spring Festival, the same store sales fell by 28% year-on-year, while the same store sales in the mainland dropped by 31%, while the local stores in Macao, Hongkong, caused a 22% decline in the number of mainland visitors and the weakening of the retail market, which affected the middle of January.

For many years, it fell by 57.5% to HK $4.20.

And the situation of Lufu jewelry is not so good.

In the three quarter, compared with the two quarter, the 6% decline in Lufu group rose to 25%, while the mainland and Hong Kong and Macau declined 10% and 26% respectively.

However, in the recently released report by the farba investment bank, it is estimated that the P / E ratios of Zhou Dafu and Lufu group in the 2017 fiscal year are 1.2 times and 0.9 times respectively, so they are considered to have bottomed out.

At the same time, because the stock market, especially the Shanghai and Shenzhen stock market's large fluctuations, will make the capital flow to the gold to avoid danger, thus driving the gold price to rise. The gold price will rise by 15.7% this year.

Meanwhile, the company believes that the sales of the same store during the Spring Festival season is mainly due to the increase in the number of outbound tourists from the mainland.

Consumer sentiment is weak, but it does not fully represent the overall trend.

Therefore, farba will raise Zhou Dafu's target price to HK $4.75, and the rating will be raised from holdings to holdings.

While the investment bank of Lufu Group believes that its hedge ratio is relatively low, and the proportion of gold sales is relatively high, it will benefit more from the rise in gold prices.

The Bank of BFA has raised its rating from holdings to buy.

Meanwhile, the target price was HK $20 from the original HK $16.25.

For more keen venture capital investors, the stock market may be losing confidence in 2016, but the gold price rally is also a good investment opportunity.

But can Zhou Liufu and Liu Fu jewellery really boost the same store sales as the price of gold that the investment banks are willing to pick up? That depends on how the brand goes in the current good market.