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Covid-19's impact on the jewelry industry

Domestic news

Zhou Dasheng

1. During the period from March 18, 2019 to March 27, 2020, the company's shareholders, Northern Light Investment, reduced their cumulative holdings of 32,292,030 shares through centralized bidding and block trading, and the shareholding ratio dropped from 12.76% to 7.76%

2. Shenzhen Zhoushi Investment Co., Ltd., the company's controlling shareholder, pledged part of its equity on April 3, with a pledge of 32,700,000 shares, accounting for 8.05% of the shares held by it and 4.47% of the company's total share capital.

Jinyi Culture

The company's subsidiaries from December 6, 2019 to March 31, 2020, various government subsidy funds recognized as profit or loss totaled 7.72 million yuan, accounting for the absolute value of the company's most recent audited net profit attributable to shareholders of listed companies 14.15% of the total, of which the government subsidy funds actually related to income totaled 7.22 million yuan; the government subsidy funds related to assets totaled 500,000 yuan

Yuyuan

As of March 31, 2020, the company has repurchased 10,000,076 A shares through centralized auction transactions, accounting for approximately 0.2575% of the company ’s total share capital. The total funds paid have been RMB 74,025,311.65 (excluding transaction fees) ), The lowest transaction price is RMB 6.97 per share, and the highest transaction price is RMB 7.76 per share

Airdrie

The company agreed to provide joint liability guarantees for qualified franchisees, distributors, and suppliers within the credit limit of the designated bank under the premise of controllable risks, with a total guarantee amount of 150 million yuan; agreed to the company and its subsidiaries in 2019 Apply to banks and other financial institutions for a total credit limit of no more than RMB 1,641 million, and if necessary, the related parties of the company provide various guarantees for the comprehensive credit limit to be applied within the above-mentioned quota range free of charge, or apply for a credit limit for the company The third party providing the guarantee provides counter-guarantee

As of the date of this announcement, the actual external guarantee balance of the company and its subsidiaries was RMB 733,400,000, accounting for 49.99% of the company's 2018 annual audited net assets.

Among them, the guarantee balance for downstream companies was RMB 100 million, accounting for 6.82% of the company's most recent audited net assets.

Ming brand jewelry

Suzhou Haowu Information Technology Co., Ltd., due to the failure of the 2018 performance commitments, has to pay compensation of RMB 123,154,940.23 to Ming Jewelry. As of March 31, 2020, it has accumulatively paid RMB 76,376,899.75 for the 2018 performance commitment compensation, accounting for 62.02% of the 2018 performance commitment compensation.

Among them, the profit commitments of Wang Meiling, Yan Weihu, Chen Xing, Huang Jun and Liu Yong have not yet been fulfilled, and the company has to pay 46,778,040.50 yuan for the 2018 performance commitment compensation.

Cuihua Jewelry

On April 2, the company issued an announcement saying that Guo Yuchun, the company's controlling shareholder and concerted party, had already released the pledge procedures for the company's shares, and the number of pledged shares released was 1.887 million shares, accounting for 0.73% of the company's total share capital.

Jinzhou Cihang

The company issued an announcement on April 1st that part of the company's shareholders Anhui Shengyun's shares were auctioned according to law. After the auction, the company's share of the company's shares was reduced from 5.17% to 4.23%, and it was no longer the company's shareholders holding more than 5%.

Xie Ruilin

The company issued a loss warning, which is expected to have a loss of not less than 80 million Hong Kong dollars by the end of 3.31.

Golden Cat Silver Cat

On March 30, Golden Cat and Silver Cat released their annual performance report as of December 31, 2019. During the period, operating income was 1.249 billion yuan, a 50% decrease from the same period last year; net profit was -508.3 million, compared with 143 million last year ; A net increase of 23 stores to 121 during the year.

In 2019, Golden Cat and Silver Cat introduced the chairman of Jin Dafu Yao Runxiong as a shareholder, which will promote the establishment of a comprehensive strategic partnership between the Group and Jin Dafu Jewelry.

Qiantang Holdings

The company announced on April 3 that for the nine months ended December 31, 2019, unaudited revenue from the sale of pearls and jewelry products fell by more than 30% compared to the same period in 2018.

Due to the outbreak of the epidemic, economic activity has slowed and consumption patterns have changed. It is expected that the group's revenue will maintain a downward trend to a certain extent for the remainder of the first quarter of 2020 or even the first half of the year.

Chiba Jewelry

It was announced on April 2 that Lin Mingjie, the company's shareholder, pledged 3,624,000 shares with limited sales conditions, accounting for 3.2822% of the company's total share capital. The pledge period was from March 30, 2020 to April 1, 2021. The pledged shares are used for financing, and the pledgee is Beijing Culture Technology Financing Guarantee Co., Ltd. There is no associated relationship between the pledgee and the pledge shareholders.

Xuping Jewelry

On April 2, the company issued the "Announcement on the Bank's Credit Expected in 2020". The subsidiaries Liuzhou Xuping Jewelry Co., Ltd., Hezhou Xuping Jewelry Co., Ltd. and Zhejiang Xuping Jewelry Co., Ltd. For capital needs, in 2020, it is planned to apply to the bank for a total credit limit not exceeding RMB 30 million (inclusive).

Yihengzhen

The company was sued for the non-repayment of the loan, and the first-instance judgment reverted to suing Bikong Longxiang with 150 million principal and corresponding interest

Jinhao

The company intends to apply for the termination of the listing of shares in the national SME share transfer system.

International News

LVMH expects revenue to decline by 20% in the first quarter

Due to the outbreak of the New Crown epidemic, many of its global stores are closed. LVMH, a well-known luxury goods group that owns jewelry brands such as Bulgari and Chaumet, expects revenue to fall between 10% and 20% in the first quarter of this year. The performance of the whole year of 2020 depends on the control of subsequent epidemic situations in various countries.

Former H & M North America President joins Pandora

On March 24, Pandora announced that the company has hired Martino Pessina, the former president of H & M North America, as the chief commercial officer. It will be responsible for commercial operations in the global market, improve the planning and implementation of merchandise sales and channel development, and directly report to CEO Alexander Lacik report.

Martino Pessina will also be responsible for Pandora's newly established network and franchise management department, overseeing the store network and supporting franchise partners worldwide.

Sotheby's online auction performance exceeds expectations

Sotheby's recent online jewelry auction took a total of $ 739,375, exceeding the previously expected upper limit of $ 671,600. The person in charge of Sotheby's related business said that this is by far the highest turnover online jewelry auction. The auction transaction rate of the auction lots is as high as 97%, and half of the transaction prices are higher than expected.

The bidders for this auction come from 32 countries in North America, Europe, the Middle East and Asia, of which about 22% are new buyers, with an average of six bidders per lot.

India's gem and jewelry exports are getting worse

According to the India Gem and Jewelry Export Promotion Council (GJEPC) estimates, affected by the new crown epidemic, India ’s gem and jewelry exports will fall by US $ 2.68 billion to US $ 34.88 billion in the 19-20 fiscal year (April 2019-March 2020).

The organization pointed out that between April and November 2019, India ’s gem and jewelry exports fell by 5.53% year-on-year due to the challenges posed by India ’s domestic policies and procedures and the weakness of the world ’s jewelry import market; December 2019 to 2020 During February, the negative effects of the new crown epidemic were superimposed, resulting in a decrease of 11.32%.

In addition, as India entered a full blockade in March 2020, customs and other businesses have been suspended, and the relevant data in March is expected to decline further.

From April 2019 to February 2020, India ’s exports of cut diamonds, colored gemstones and costume jewellery fell by 19.38%, 17.38% and 5.95%, respectively; while the three items ’exports fell by a single month in February 2020 Up to 40.92%, 64.58% and 39.78%.

Hong Kong publishes February retail data, jewellery and watches fell by nearly 80%

Affected by the decline in the tourism economy, the decline in local consumer demand and the coronavirus epidemic, sales of jewelry and other luxury goods in Hong Kong fell to an all-time low in February, and sales of jewelry, watches, watches and other high-value gifts fell 79% year-on-year to 15.6 100 million Hong Kong dollars. The Census and Statistics Department of the Municipal Government reported on March 31 that sales of all retail categories in Hong Kong fell by 44% to HK $ 22.74 billion in February.

Downturn in the diamond industry has caused Botswana's sovereign credit rating to fall

Due to the current global economic recession and the decline in diamond revenues, S & P Global Ratings downgraded Botswana ’s long-term sovereign credit rating from “A-” to “BBB +” last Friday, noting that it is unlikely to be upgraded in the next two years .

S & P stated in its report: "Botswana's weak financial and external balance sheets are vulnerable to the long-term sluggish diamond market." "Maintenance of the country's major mines delayed domestic diamond production in 2019.

In addition, China ’s demand, one of Botswana ’s main target markets, declined in February as the new coronary pneumonia epidemic intensified the economic slowdown. S & P expects that the global economic downturn will continue to affect diamond demand and prices in the coming months.

AWDC and IDI's online trade fair opens

The online diamond trade fair jointly organized by the Antwerp World Diamond Center and the Israel Diamond Association opened on March 30. This online exhibition was conducted on the Virtual Diamond Boutique trading platform. A total of 70 exhibitors and 500 buyers participated Online activities.

The 70 exhibitors are all registered sellers in Belgium (43) and Israel (27), and all exhibits are from exchanges in both places

GJEPC plans to organize virtual business meetings

The Gem and Jewelry Export Promotion Council of India (GJEPC) announced plans to hold virtual meetings, mainly for potential trading partners from Switzerland and Singapore, to mitigate the impact of the trade disruption caused by the outbreak.

GJEPC said that Swiss and Singapore jewelry merchants have long imported large amounts of gems and jewelry products from China and Hong Kong, and the new coronavirus outbreak in China in the past few months has broken this normal.

The Committee has sent a letter to the exporter members, informing GJEPC that it has requested the Swiss Embassy in India to identify potential buyers of gemstones and jewelry products, especially Swiss gold jewelry products buyers, to communicate through B2B online meetings and to propose more Members join this program.

Dubai Trade Center launches aid program

The Dubai Multi Commodity Center (DMCC) will implement a package of support programs for its trading members during the coronavirus pandemic, including discounts and fee reductions. This measure will take effect from April 1st to June 30th, which includes the reduction of two months of rent for DMCC companies that have to be temporarily closed due to a mandatory government blockade. The organization's Flexi Desk and Business Center tenant rents will be suspended for three months, and members' license renewal fees will receive a 30% discount.

In order to incentivize new companies to register and companies that are registering, DMCC has reduced the total installation fee of enterprises located in Jumeirah Lake Tower Building by 80% and the cost of other enterprises by 50%. DMCC also digitized the application process, and customers can complete registration online.

Photo: The Dubai Diamond Exchange in the DMCC. (DMCC)

De Beers cancels this year's third viewing session

On March 30th, De Beers announced that due to the ongoing epidemic, the third inspection meeting in 2020 held in Botswana was cancelled. At the same time, De Beers allows viewers to postpone 100% of their purchase plan until later this year, and will seek new transaction methods to meet the viewers' demand for diamond supply in the coming weeks.

Gemfields suspends mining operations

Due to the impact of the new crown epidemic, Gemfields suspended most of the company's business, including the mining of emerald mines in Zambia and the exploration of gemstones in Madagascar. The company's London headquarters and India office are already in remote work.

The company pointed out that the emerald and ruby ​​viewing sessions originally scheduled for May and June are likely to be rescheduled in the second half of the year, but if the market cannot be fully recovered by then, the gem viewing sessions scheduled for November and December Will consider canceling.

In 2019, 93% of Gemfields' revenue came from its six sales during the year. The 2020 bidding postponements and cancellations due to the epidemic will undoubtedly have a severe impact on its financial situation.

Gem Diamonds flexible tenders pay off

On April 1, diamond miner Gem Diamonds stated that it had achieved $ 12.1 million in revenue in its first round of large diamond sales. Due to the government's control of travel and business during the epidemic, the recent sales activities of the world's major diamond miners have been stuck, and Gem Diamonds has achieved good results in this transformation. The new sales methods include direct sales and partners Agreement, etc., the company said it will continue to maintain flexible tendering methods until the end of epidemic control.

Lucara Diamond online platform performs well

The company said on March 31 that the outbreak of coronavirus threatened the company's trading activities in Botswana and had a serious negative impact on rough diamond prices. In March, the sales price of the company's products in Gaborone was within ± 1% of the expected. A total of 83,610 carats of diamonds were sold, including 37 large-diameter diamonds of 10.8 carats and more, four of which cost more than $ 1 million.

At the same time, Lucara's online sales platform Clara continues to attract industry attention. Since 2020, the platform has launched six sales activities, and 25 manufacturers have participated in the completion of a total of more than 1,800 carats of 821 diamond transactions.

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