Citi Reports Strong Start to LNY Sales for LAOPU GOLD; Earnings Outlook Upgraded
Lunar New Year Promotions: SKP mall in Mainland China launched Lunar New Year promotional activities on January 24, leading to increased foot traffic for LAOPU GOLD, driven by rising gold prices and strong demand.
Revenue Growth Expectations: The broker anticipates triple-digit revenue growth during the Lunar New Year period and has raised its 2026 and 2027 revenue forecasts for LAOPU GOLD by 5% due to higher same-store sales growth expectations.
Earnings Forecast Adjustments: Following a positive outlook on LAOPU GOLD, the broker increased its 2026 net profit forecast by 5% and also raised the 2027 forecast by 5%, despite slightly lowering gross margin expectations to 38%.
Buy Rating and Target Price: The broker maintained a Buy rating for LAOPU GOLD with a target price set at HKD1,119, reflecting confidence in the company's performance amid the holiday sales boost.
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G Sachs Predicts 4% Slowdown in China's Jewelry Market Growth This Year, Recommends LAOPU GOLD
China's Jewelry Market Growth: Goldman Sachs forecasts a slowdown in China's jewelry market growth to 4% in 2026, down from approximately 10% in 2025, due to high base effects and unstable consumption power, maintaining a Neutral outlook for the sector.
Gold Price Predictions: The broker anticipates gold prices will reach USD 5,400 per ounce by the end of 2026, representing a 25% year-over-year increase, with demand supported by rising prices but facing challenges in product margins and sales consumption.
Market Performance: The jewelry sector's stock prices have outperformed the Hang Seng Index (HSI), indicating a strong market performance despite the anticipated slowdown in growth.
Investment Recommendations: Goldman Sachs has a Buy rating on LAOPU GOLD (06181.HK), citing growth opportunities and setting a target price of HKD 1,128, despite current short selling pressures.
CMSI Launches LAOPU GOLD with Underweight Rating, Anticipates Significant Revenue Slowdown and Decline in Earnings Quality
Revenue Growth Prediction: CMSI forecasts that LAOPU GOLD will experience a significant slowdown in revenue growth, dropping from 220% in 2025 to approximately 30% in 2026.
Marketing Strategy Concerns: The company's current revenue is largely driven by FOMO marketing tactics rather than genuine sales growth, which raises concerns about its sustainability compared to true luxury brands.
Deteriorating Earnings Quality: The report indicates a decline in LAOPU GOLD's earnings quality, with a conservative store expansion plan focusing more on efficiency than growth, limiting its market presence.
Investment Rating and Target Price: CMSI has assigned an Underweight rating to LAOPU GOLD, setting a target price of HKD825.5 for the stock.
