Laopu Gold, a prominent Chinese luxury brand, is projecting a significant slowdown in its profit growth for the first half of 2026, with an expected increase of 279-288% year-over-year, to between RMB 2.23 billion and RMB 2.28 billion ($311.11 million to $318.08 million). This projection follows a period of robust performance fueled by surging gold prices. Despite the slowdown, the company's revenue for the first half is still expected to rise by 241-255% compared to the previous year, driven by expansion of its online presence and new offline boutiques in locations like Shanghai, Shenzhen, Hong Kong, and Singapore.
The anticipated deceleration in profit growth is primarily attributed to a recent retreat in gold bullion prices from their peak. Analysts at Morgan Stanley also pointed to market downgrades in earnings expectations and concerns over rising gold prices contributing to a stock fall from its early July peak. Citi analysts added that the share price retreat is due to a reset in market expectations and "unwinding fund flow," though they noted the stock now appears relatively cheap.
Despite the recent stock decline—nearly 5% to its lowest since May 20, and on course for a ninth consecutive session of decline—Laopu Gold's shares have still skyrocketed by over 200% year-to-date. Nomura analysts believe the current valuation has become more attractive, affirming the company's strong growth story. Oliver Wyman, a consulting firm, highlighted that Laopu's earnings are less susceptible to gold price fluctuations than traditional jewelers due to its distinctive product designs, which combine ancient craftsmanship with modern appeal, popular among younger consumers.
