CICC has issued a research report stating that, considering LAOPU GOLD's (06181) impressive sales performance, it has raised its EPS forecasts for 2025/2026/2027 by 5%/11%/10% to RMB 28.10/40.83/51.27. The current share price corresponds to a P/E ratio of 14x/11x for 2026/2027. The firm maintains its Outperform rating. While considering adjustments in industry valuations, CICC maintains its target price of HK$1,079.06, which corresponds to 24 times the 2026 P/E ratio, implying a 65% upside potential from the current share price. Key points from CICC are as follows:
The company is projected to achieve a net profit growth of 226%-233% year-on-year for 2025. LAOPU GOLD has released a positive profit alert, anticipating 2025 revenue to be between RMB 27-28 billion, representing a year-on-year increase of 217%-229%. Net profit is expected to be between RMB 4.8-4.9 billion, a year-on-year growth of 226%-233%.
Strong brand positioning is expected to drive continued high revenue growth in 2025. LAOPU GOLD's brand momentum remained robust throughout 2025, solidifying its leading market position. The company launched new product series such as the Sunflower Collection, Seven Gourds, and Light Goddess, showcasing further advancements in design and craftsmanship. The company accelerated its presence in premium commercial districts, securing locations in China's top ten leading commercial centers. In 2025, LAOPU GOLD opened 10 new stores and renovated/optimized 9 existing stores, successfully establishing new outlets in prominent locations like Shanghai's Henglong Plaza, Shenzhen's Bay MixC, Hong Kong's IFC Mall, and Singapore's Marina Bay Sands. The combination of an increasingly powerful brand, the launch of high-quality new products, and sustained brand visibility across channels is driving continuous rapid growth both online and offline. The company forecasts 2025 revenue of RMB 27-28 billion, a 217%-229% increase year-on-year.
Rapidly rising gold prices impacted gross profit performance in 2025. The price of gold showed a sharp upward trend overall in 2025, with the spot price of London gold increasing by 65% cumulatively for the year. LAOPU GOLD implemented price increases in February, August, and October 2025. However, considering the pace of gold price appreciation and product sales cycles, full-year gross profit margins remained under pressure. Following the significant price adjustment in October, the institution anticipates a notable improvement in gross profit performance.
A strong sales performance is anticipated for the first quarter of 2026. The first quarter of 2026 includes the Spring Festival and Valentine's Day, which are traditional peak seasons for gold and jewelry consumption. Driven by the festive atmosphere and price increase expectations, LAOPU GOLD stores in cities like Beijing, Shanghai, and Shenzhen experienced long queues. During a Tmall flagship store promotion on February 26, sales surpassed RMB 300 million within just one second of launch, with single-day sales for the store exceeding RMB 1 billion, leading to sell-outs of multiple products. The institution expects the company to continue delivering impressive sales results in Q1 2026, supported by ongoing strong brand momentum.
Risk warnings include significant fluctuations in gold prices, intensifying industry competition, and potential underperformance in the retail environment.
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