A report from Citigroup indicates that the New Year promotional event at the mainland SKP shopping mall commenced on January 24th. Based on the bank's on-site observations, LAOPU GOLD (06181) experienced notably high in-store customer traffic during the weekend. The bank believes the recent surge in gold prices has further fueled this robust demand, anticipating that the triple-digit revenue growth from this New Year holiday promotion will persist through the Spring Festival period. Driven by an increased expectation for same-store sales growth, the bank has raised its revenue forecasts for LAOPU GOLD for 2026 and 2027 by 5%. This adjustment is expected to counterbalance the negative impact on gross margin assumptions resulting from the rapid appreciation of gold prices. The bank reiterated its "Buy" rating with a target price of HK$1,119. Following a prior initiation of a 30-day positive catalyst watch on LAOPU GOLD due to its Spring Festival sales potential and subsequent earnings forecast upgrades, the bank has now further increased its 2026 revenue forecast by 6%, based on an assumption of 15% same-store sales growth. Concurrently, it has slightly lowered its gross margin forecast to 38%. After incorporating these comprehensive adjustments, the bank has raised its 2026 net profit forecast by 5%. Based on the higher 2026 baseline and consistent growth assumptions, the 2027 net profit forecast has also been increased by 5%. Furthermore, due to the downward revision in gross margin, the bank has slightly lowered its 2025 net profit forecast by 1%. Current projections now anticipate that 2026 revenue and net profit will grow by 45% and 57%, respectively.
Comments