LAOPU GOLD (06181) saw its shares rise more than 3%. At the time of writing, the stock was up 2.17%, trading at HK$754 with a turnover of HK$174 million. A research report from China Securities (CSC) noted that after a rapid increase, gold prices experienced a significant correction. On February 3rd, the closing price for gold spot on the Shanghai Gold Exchange was 1,098 yuan per gram, representing an increase of 10.5% since the start of the year and a 10.1% rise since LAOPU GOLD's last price hike announcement. Since late January, the company has launched New Year promotional activities in multiple store locations, including SKP, Hangzhou Tower, Guangzhou TaiKoo Hui, and Hong Kong, with discounts ranging from approximately 8.75 to 9 percent. Driven by these discounts and expectations of further price increases, conspicuous consumer queuing and抢购 have been observed. Unlike last year, the company has ample inventory this time, and with the brand's expanding reach, it is expected to accelerate profit growth in 2026 (the institution has raised its adjusted net profit forecast for 2026 to 7 billion yuan).
Bank of China International pointed out that despite recent significant volatility in gold prices, it anticipates robust consumer demand for gold jewelry will persist into the first quarter of 2026. The wealth effect from stock market gains, combined with a more accommodative monetary environment, is expected to further encourage consumers to choose jewelry as a means of value storage and investment. Under the current market structure, the institution anticipates two distinct types of winners will emerge: high-end retailers capable of supporting substantial premiums, exemplified by LAOPU GOLD; and retailers with a strong market presence in Hong Kong and Macau, where store foot traffic has increased significantly since the gold value-added tax hike in November 2025.
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