Few stocks have ever risen as violently. Since its Hong Kong IPO in June 2024 at HK$40.50, Laopu’s shares climbed almost without pause, peaking near HK1000 in July 2025, a gain of roughly 25x, or more than 2300,% in barely a year. At the height it ranked among the best-performing stocks in the world, and the market treated heritage gold as an unstoppable structural story capable of absorbing any amount of expansion. The idea that the shares could fall meaningfully felt almost unthinkable.

Despite this explosive growth, the stock experienced a substantial correction. The reason was not deteriorating demand but concerns surrounding capital intensity and balance sheet risk. To support rapid expansion and meet strong consumer demand, inventories surged dramatically, forcing the company to tie up significant amounts of working capital. Financing costs rose sharply, with finance expenses increasing by more than 356% year-on-year.

Instead of pursuing broad store coverage, it focuses exclusively on self-operated boutiques located in China’s most prestigious luxury shopping centers such as SKP and MixC. This strategy has produced extraordinary productivity. According to the company, it ranked first among global luxury groups in revenue per shopping mall and revenue per square meter in China during 2025.