Shares of Laopu Gold, a Hong Kong-listed Chinese jewelry company, dropped nearly 5% to their lowest levels since May 20, despite the company forecasting a significant increase in its first-half 2025 net profit. This slide marked the ninth consecutive session of decline for the stock. Nomura analysts noted that the stock has fallen 24% year-to-date, underperforming the Hang Seng Index.
Laopu Gold anticipates its net profit to increase between 279% and 288% year-over-year, reaching between RMB 2.23 billion and RMB 2.28 billion ($311.11 million to $318.08 million) for the first half of 2025. The company also projects its revenue for the same period to jump between 241% and 255% compared to the previous year. This growth is attributed to the brand's expansion through online channels and new offline boutiques in cities like Shanghai, Shenzhen, and Hong Kong.
Despite these strong projections, Citi analysts characterized the share price retreat as a "reset in market expectations" and "unwinding fund flow," although they now consider the stock relatively cheap. Morgan Stanley analysts pointed to market downgrades in earning expectations and concerns over rising gold prices as reasons for the stock's fall from its early July peak. However, consulting firm Oliver Wyman countered that Laopu Gold's earnings are less susceptible to gold price fluctuations than traditional jewelers due to its distinctive product designs, which blend ancient craftsmanship with contemporary appeal, appealing to younger, affluent Chinese consumers.
