Maintain Buy but cut target price: weak gold prices pressure 2Q26 sales, while long-term premium brand growth remains favored

Overview

This report is Nomura's company update on Laopu Gold (6181.HK). Based on an investor conference call with the company on July 16, the report focuses on the pressure from the 2Q26 decline in gold prices on sales, the company's operating actions to stimulate demand, store upgrades and premium customer expansion, as well as the resulting earnings forecast and valuation adjustments. Nomura maintains its Buy rating but cuts the target price to HKD 905.00.

Core views

The core view is: in the short term, the 2Q26 drop in gold prices created sales headwinds, causing FY26F sales growth to come in below expectations and prompting cuts to revenue and earnings forecasts; in the medium to long term, Laopu Gold is still strengthening its sustained premium brand positioning through product innovation, boutique upgrades, VIC customer base expansion, and improved consumer awareness. If gold prices stabilize over the next few quarters, the market's pessimistic expectations for sales may ease.

Analysis framework

The report uses a combination of company management communication, forecast revisions, and relative valuation. Nomura first adjusts its FY26F-28F revenue and earnings forecasts based on 2Q26 sales performance and the impact of falling gold prices, then lowers the valuation multiple with reference to historical F12M P/E levels, and derives the target price using 20.0x FY26F P/E.

Methodology notes

• Valuation methodsP/E multiple method

  20.0x FY26F P/E

  The target price of HKD 905 is based on 20.0x FY26F P/E, close to the company's average F12M P/E of about 20.3x since its June 2024 listing; this multiple is reduced from the previous 22.5x to align with slower earnings growth forecasts.

• Earnings forecastForecast revision

  Cuts to FY26F-28F revenue and earnings

  Nomura cut its FY26F-28F revenue forecasts by 5%-6% and earnings forecasts by 9%-11%, mainly reflecting increased sales uncertainty caused by falling gold prices, although gross margin resilience partly offsets the negative impact.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Laopu Gold (6181.HK)

  Covered name

  Strengths

  Clear positioning as a premium gold jewelry brand; management continues to advance product innovation, boutique upgrades, and VIC customer expansion; gross margin performance is resilient, and improving long-term consumer awareness remains a key growth driver.

  Weaknesses

  2Q26 sales were dragged down by falling gold prices, and short-term sales volatility and slower earnings growth led to cuts in forecasts and valuation multiples.

  Comparison

  The report uses the Hang Seng Index as the company's benchmark and the company's average F12M P/E since listing as the valuation reference.

  Risks

  A significant decline in gold prices, fashion risk higher than expected, and a macro environment weaker than expected.

Key data

• RatingBuyRating maintained.
• Target priceHKD 905.00Cut from HKD 1,114.00.
• Closing priceHKD 350.00July 17, 2026.
• Implied upside+158.6%Calculated based on target price and closing price.
• FY26F revenue forecastCNY 37,597mnPrevious forecast was CNY 39,501mn.
• FY26F attributable/normalized net profit forecastCNY 7,003mnPrevious forecast was CNY 7,663mn.
• FY26F FD normalised EPSCNY 39.70Previous forecast was CNY 43.44.
• FY26F FD normalised P/E8.3xBased on the forecast table in the report.
• FY26F dividend yield5.1%Forecast in the report.
• Market capitalizationUSD 7,890.7mnKey data at the top of the report.
• 3-month average daily turnoverUSD 70.0mnKey data at the top of the report.

Impact & implications

The investment implication is that in the short term, the share price and sales expectations remain highly sensitive to gold price trends and consumer sentiment, but the report believes that some of the sales concerns from falling gold prices have already been priced in. If the company's promotions, new products, and store upgrades continue to be effective, and gold prices stabilize, the market may refocus on its premium brand expansion and earnings resilience. The lower target price indicates more cautious earnings growth assumptions, but the Buy rating and high implied upside show that Nomura remains positive.

Risks

• A significant decline in gold prices may continue to weigh on sales and investor expectations.
• Fashion risk above expectations may affect demand for premium jewelry products and brand momentum.
• A weaker-than-expected macro environment may drag on discretionary and premium consumption.
• 2Q26 sales growth below expectations shows that short-term operating volatility remains high.

What to watch

• Whether gold prices stabilize over the next few quarters.
• The sales impact in 2H26 after rebates/gifts, affordable new products, and promotions for high-tier customers are expanded to more boutiques.
• Traffic, service area, and ticket size performance after store upgrades at Shenzhen MixC World, Shanghai IFC, Shanghai Plaza 66, and other locations.
• Progress in expanding the VIC premium customer segment.
• Whether FY26F-28F revenue, net profit, and gross margin forecasts continue to be revised.