Chow Tai Seng's nine-month franchise income falls 67.84% on the year
Franchise income was RMB 1.076bn, 19.27% of revenue against 49.39% a year earlier. Own stores and e-commerce made 78% of revenue in the first nine months, Huaxia Times reports from the filing.
By Carat Capital
What changed
Franchising shrank to a fifth. Chow Tai Seng's franchise income fell 67.84% on the year to RMB 1.076bn in the first nine months of 2026, Huaxia Times reports. That is about a fifth of revenue.
What it means
- If you supply Chinese franchisees: franchisees are destocking, the company says, and restock through designated suppliers, Everbright Securities says.
- If you hold the shares: own stores and e-commerce made 78% of revenue, and both grew more than 30% on the year.
- What this is not: a third-quarter figure. These are nine-month totals, from a press report of the filing.
Key figures
| Franchise incomeRMB 1.076bn, nine months, y/y | −67.84% |
|---|---|
| Franchise shareof revenue, from 49.39% | 19.27% |
| Gold wholesaleto RMB 362m, y/y | −84.32% |
| Franchise storesnet 657 fewer since January | 3,424 |
Source: Chow Tai Seng (002867.SZ) third-quarter report, 27 October 2026, as reported by Huaxia Times on Eastmoney, 31 October 2026 08:00 Beijing · first nine months of 2026 against a year earlier
Wholesale fell hardest.
Gold wholesale shrank. Gold product sales to franchisees fell 84.32% on the year, to RMB 362m. The company says it actively changed its supply structure, so brand fees rose as a share.
Franchisees pay fees instead. Everbright Securities, in a note of 28 October, says brand fees rose to 48.2% of franchise income in the first half, from 15.2%.
| Channel | Nine months 2026 | Change | Share of revenue | A year earlier |
|---|---|---|---|---|
| Franchise | RMB 1.076bn | −67.84% y/y | 19.27% | 49.39% |
| Own stores | RMB 1.764bn | +31.46% y/y | 31.59% | 19.82% |
| E-commerce | RMB 2.595bn | +33.42% y/y | 46.46% | 28.72% |
| Total revenue | RMB 5.584bn | −17.54% y/y | ||
| Net profit attributable to shareholders | RMB 651m | −26.15% y/y |
Source. Huaxia Times, carried on Eastmoney on 31 October 2026, reporting the company's third-quarter filing.
Inside franchise income. gold product wholesale was RMB 362m, down 84.32% on the year, and gem-set wholesale RMB 40.46m, down 87.97%.
The three channels. sum to 97.32% of revenue.
Own stores and online gained share.
Both rose over 30%. Own-store income rose 31.46% and e-commerce 33.42% on the year. Together they made 78% of revenue, Huaxia Times reports.
A net 670 fewer stores.
Net 670 fewer. The store count ended September at 3,809, a net 670 fewer than at the start of the year.
Net franchise closures. Franchised stores fell by a net 657 to 3,424.
Small-city shops, it says. The company told investors on 28 October that closures are mainly unprofitable street shops in lower-tier cities and counties.
What to watch
- By 30 April 2027The 2026 annual report. The test: whether franchise income keeps falling as brand fees grow.
- MonthlyShenzhen and Shanghai counter prices for 24-carat gold. The test: whether a lower gold price brings franchisees back to buying stock.
The story so far
Go deeper
What would change this call
Franchisees buying stock directly again. If gold prices settle and wholesale income returns, the fall reads as a gold-price effect, not a change of model.
How a franchise earns for Chow Tai Seng
Franchise income has two parts: product wholesale, where the company sells stock to franchisees, and brand-use fees. When franchisees restock through designated suppliers, the company collects only the fee, so its income falls even if counters keep selling, Everbright Securities says.
Method
Huaxia Times, carried on Eastmoney, https://finance.eastmoney.com/a/202610313917509756.html, dateline '2026年10月31日 08:00', read 8 November 2026 (67,768 bytes). Figures read in the article's own paragraphs, before the page's recirculation lists; raw-byte hits: '10.76亿元' 1, '67.84%' 1, '49.39%' 1, '19.27%' 1, '17.64亿元' 1, '31.46%' 1, '25.95亿元' 1, '33.42%' 1, '31.59%' 1, '46.46%' 1, '19.82%' 1, '28.72%' 1, '3.62亿元' 1, '84.32%' 1, '4046.01万元' 1, '87.97%' 1, '55.84亿元' 1, '17.54%' 1, '6.51亿元' 1, '26.15%' 1, '15.2%' 1, '48.2%' 1, '3809家' 1, '670家' 1, '657家' 1, '3424家' 1. The company's own words, as quoted: franchisees '普遍采取去库存策略' (generally destocking); the fall's main factor was '公司主动调整供货结构' (the company actively adjusting its supply structure). Checks, ours: 0.1927 x 5.584bn = 1.076bn; 17.64 + 25.95 = 43.59, and 43.59 / 55.84 = 78.1%, matching '两者合计占比升至78%'; a year earlier 19.82% + 28.72% = 48.54%; channels 19.27 + 31.59 + 46.46 = 97.32%. Not printed: a third-quarter-alone figure, which would be derived from our 1 September first-half page. The filing itself (SZSE) was not opened; every figure is the newspaper's report of it. Prior coverage: the 1 September page covers the first half (revenue RMB 3.641bn, down 20.79%); this page covers the first nine months and the franchise split.