Movement Alert|Laopu Gold Rises 3.16% in Regular Trading, UBS Affirms Oversold Thesis with Strong H1 Growth Expectations

Market Focus07-07

On July 7, Laopu Gold rose 3.16% in regular trading, reaching 392.0 HKD/share with turnover of 1.33 billion HKD, rebounding after recent weakness.

On the news front, UBS released a research report lowering its target price from 930 HKD to 650 HKD but maintaining a Buy rating, explicitly stating the stock is oversold. The bank expects Laopu Gold to deliver H1 revenue and net profit growth of approximately 93% and 118% year-over-year respectively, citing brand strength, channel upgrades, VIC services, and new store contributions as factors offsetting gold price pullback pressure. UBS also forecasts gold price recovery in H2. Additionally, CICC Securities previously noted that Q2 performance likely represents the annual trough, with Q3 sequential improvement expected. Despite Q2 revenue estimated to decline roughly 10% YoY due to gold price correction, gross margin is projected to expand significantly thanks to price hikes implemented in late February and low inventory costs, supporting continued net profit growth.

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