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LAOPU GOLD (06181.HK) Rises Over 4%; JPM Says Market Underestimates Efforts to Tackle Gold Price Volatility
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LAOPU GOLD (06181.HK) once peaked at HKD491.8 today and is now trading at HKD490.2, up 4.3%, with turnover of 969,800 shares, involving HKD473 million. JPM said in a report that LAOPU GOLD's share price has fallen 45% since end-Jan and is currently trading at 8x and 7x its forecast PE for 2026 and 2027, respectively. The broker believes the decline was due to investor concerns over uncertainties in same-store sales trends amid gold price volatility. Although fluctuations in gold prices may trigger a wait-and-see attitude in 2Q26 and put pressure on same-store sales trends, the market has underestimated LAOPU GOLD’s proactive efforts to navigate the sharp cycles of gold price volatility, including a more flexible new product launch strategy, further enhancement of customer experience, and upgrades to its distribution network. LAOPU GOLD is taking measures to strengthen consumers’ sense of value, including accelerating new product launches. From January to May, it announced eight new series, incorporating more gemstones into designs and introducing new elements, alongside adopting flexible pricing strategies. In addition, JPM’s sensitivity analysis for 2Q26 assumes same-store sales growth ranging from -60% to +10%, implying 1H26 sales growth of 52% to 78% YoY and net profit growth of 81% to 112%. The controlling shareholder increased its stake by approximately HKD166 million at around HKD495 per share on 20 May, which should provide certain downside protection. JPM expects ample upside in LAOPU GOLD’s valuation. Based on a discounted cash flow (DCF) methodology, the broker set a TP of HKD1,296 and reiterated its Overweight rating, adding that LAOPU GOLD is its top pick in China’s gold and jewellery sector. (ad/u) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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