CICC has released a research report, essentially maintaining its 2025 EPS forecast for LAOPU GOLD (06181) at RMB 26.8. Considering the continuation of the company's strong sales momentum, the firm has raised its 2026 EPS forecast by 3% to RMB 36.9 and introduced a 2027 EPS forecast of RMB 46.4. The current share price corresponds to a forward P/E ratio of 17x and 13x for 2026 and 2027, respectively. CICC maintains an OUTPERFORM industry rating. By switching the valuation base to 2026, the target price is kept unchanged at HK$1,079.06, implying 26x and 20x 2026/2027 P/E ratios and representing an upside potential of 58%. The main points from CICC are as follows:
The company's recent developments since early 2026 indicate that LAOPU GOLD has continued its strong brand momentum and sales performance. With the arrival of peak industry seasons such as the Spring Festival and Valentine's Day, coupled with expectations of price increases in the gold jewelry sector, the firm anticipates the company will continue to achieve robust end-market performance.
The brand's strong momentum persists, although rising gold prices are expected to temporarily impact gross margins in the second half of 2025. Observations indicate that LAOPU GOLD's brand power remains robust, with active customer footfall in stores across multiple locations. From a channel perspective, the company continued to optimize and upgrade its store network in 2H25, opening new outlets in key commercial areas such as Hong Kong's IFC, Shanghai's Henglong Plaza, and Shenzhen's Wanxiang City, while also renovating several existing stores. These efforts further enhance brand influence and channel quality, contributing to a sustained elevation of the brand's premium perception. Despite the company implementing two product price hikes in August and October of 2H25, considering the rapid rise in gold prices and product sales cycles (the spot closing price of Shanghai Gold Exchange's AU9999 increased by 24% and 28% in 1H25 and 2H25, respectively), the firm expects continued pressure on the company's gross margins for 2H25.
LAOPU GOLD achieved excellent terminal sales performance in early 2026. The company launched its new "Wu Ma" (Noon Horse) series, effectively integrating traditional Chinese cultural elements with exquisite craftsmanship. Bolstered by its strong brand and product capabilities, the firm estimates that the company achieved double-digit and triple-digit year-on-year growth in domestic same-store sales and overall sales, respectively, during the New Year's Day period. For the full year 2026, the firm expects LAOPU GOLD's domestic strategy will remain focused on store optimization, while overseas markets such as Japan and Singapore still offer room for store expansion. Having navigated gold price volatility and operational environment changes during 2024-2025, the company's management capabilities have been further enhanced, accumulating more extensive experience. The firm anticipates further room for gross margin recovery in 2026.
CICC remains optimistic about the continued strengthening of LAOPU GOLD's brand momentum. Against the backdrop of rising gold prices, further price increases by gold jewelry brands are expected to enhance the perceived value, scarcity, and attractiveness of gold jewelry items. This pricing expectation is also likely to drive increased consumer attention and spending. With the arrival of the first quarter's peak season, the firm continues to be positive about rising consumer preference for gold jewelry products. LAOPU GOLD, with its unique and premium brand aura, is well-positioned to benefit sustainably.
Risk warnings include significant fluctuations in gold prices, intensifying industry competition, and terminal retail environment performance falling short of expectations.
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