The analyst rating for LAOPU GOLD (06181.HK) is a "Buy" based on several key factors outlined in the report. The company is forecasted to achieve a significant increase in adjusted net profit for 2025, projected to be between RMB5-5.1 billion, which represents a year-over-year growth of approximately 233-240%. This growth exceeds market expectations by 2-4%.
The anticipated profit growth is attributed to accelerated revenue growth and the company's ability to maintain gross margins through product price hikes. Although there has been a temporary cooling in consumer enthusiasm for gold products following a price hike and geopolitical tensions affecting gold prices, Daiwa considers this a normal reaction, as demand typically slows down shortly after price increases. They expect demand to gradually recover due to the rising popularity of new products and ongoing support for gold prices.
Overall, the strong profit forecasts and the expectation of a recovery in demand led Daiwa to assign a "Buy" rating with a target price of $880.
