Hermes 2Q26 indicates slower growth in Asia ex-Japan, but China's high-end consumption still offers structural opportunities

Overview

This report is Nomura's China consumer read-across from Hermes' 2Q26 results. Hermes' 2Q26 total revenue reached EUR4.09bn, up 6.7% y-y at constant exchange rates and slightly above market expectations; however, revenue in Asia ex-Japan grew only 2.5% y-y, below expectations and slower than in major regions. Nevertheless, Hermes management stated that sales in China continued to grow and that the China market remains a strong foundation for the company. Based on this, Nomura believes China's luxury consumption still has structural growth potential and reiterates its preference for Laopu Gold.

Core views

The core view is that China's luxury consumption is not seeing a broad-based recovery, but high-end customer groups and categories related to premium materials are showing greater resilience. Hermes' slower growth in Asia ex-Japan indicates that macro and consumer-tiering pressures remain; however, growth in China sales, signs of business stabilization, the resilience of wealthy customers, and solid performance in high-end material products such as jewelry and ready-to-wear support a positive view on premium gold jewelry name Laopu Gold.

Analysis framework

The report uses a cross-company read-across approach, observing China's high-end consumption demand through Hermes' 2Q26 regional and category revenue performance, and then mapping this to Chinese luxury and gold jewelry name Laopu Gold. For valuation, it uses the P/E multiple method, with 20x FY26F P/E as the basis for the target price, consistent with Laopu's average F12M P/E of approximately 20.3x since its listing.

Methodology notes

• Valuation methodsP/E multiple method

  20x FY26F P/E

  Nomura's target price of HKD905 for Laopu Gold is based on 20x FY26F P/E, a multiple close to Laopu's average F12M P/E of about 20.3x since its listing in June 2024.

• Cross-company read-acrossRead-across

  Inferring China's high-end consumption momentum from Hermes' 2Q26 results

  The report uses Hermes' trends in Asia ex-Japan, China sales, customer segmentation, and the performance of premium material categories as external signals for China's luxury consumption, and on this basis assesses the investment implications for Laopu Gold.

Asset mapping & comparison

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

• Laopu Gold (6181 HK)

  Core recommended name; the report maps Hermes' 2Q26 results to it as a read-across for Chinese luxury consumption

  Strengths

  Benefiting from structural growth in China's luxury consumption, the resilience of high-net-worth customers, and preference for premium material products; Nomura assigns a Buy rating and HKD905 target price.

  Weaknesses

  The consumer environment it operates in is still affected by macro pressure, demand from aspirational customers is weak, and Hermes' Asia ex-Japan growth below expectations suggests the industry's recovery is uneven.

  Comparison

  Hermes' revenue in Asia ex-Japan grew 2.5% y-y in 2Q26, below other major regions; however, continued growth and signs of stabilization in its China sales provide a reference for China's high-end consumption names.

  Risks

  A significant decline in gold prices, fashion risk above expectations, weaker-than-expected macro environment.

• Hermes (RMS FP)

  Source company for the read-across; not the main rating coverage focus of this report

  Strengths

  2Q26 total revenue slightly beat expectations, with strong performance in Leather Goods & Saddlery, Japan, the Americas, and other regions/categories; management said China remains a strong foundation.

  Weaknesses

  Growth in Asia ex-Japan was only 2.5%, below expectations and the slowest among major regions; Perfume and Beauty fell 9.5% y-y.

  Comparison

  As a global high-end luxury brand, Hermes' regional and customer-segment performance is used to observe trends in China's high-end consumption.

  Risks

  The macro environment affects demand from entry-level customers, regional growth is diverging, and price increases in 2027 are expected to be lower than in 2026.

Key data

• Hermes 1H26 total revenueEUR8.16bnUp 1.6% y-y; up 6.1% at constant exchange rates.
• Hermes 1H26 operating profitEUR3.35bnUp 0.7% y-y; operating margin of 41.1%, down 0.36 percentage points y-y.
• Hermes 2Q26 total revenueEUR4.09bnUp 6.7% y-y at constant exchange rates, slightly above Bloomberg consensus of EUR4.07bn.
• Asia ex-Japan 2Q26 revenue growth+2.5% y-yA slight improvement after +2.2% in 1Q26, but below Bloomberg consensus of +4.5% and the slowest among major markets.
• Hermes 2Q26 revenue by regionFrance EUR407mn, Europe ex-France EUR627mn, Japan EUR394mn, Asia Pacific ex-Japan EUR1.65bn, Americas EUR846mnConstant-currency y-y growth rates were +6.2%, +8.3%, +12.3%, +2.5%, and +13.7%, respectively.
• Hermes 2Q26 revenue by categoryLeather Goods & Saddlery EUR1.91bn, Ready-to-wear & Accessories EUR1.12bn, Silk & Textiles EUR212mn, Other including Jewellery and home products EUR525mn, Perfume and Beauty EUR107mn, Watches EUR134mnConstant-currency y-y growth rates were +10.2%, +3.6%, +12.2%, +4.0%, -9.5%, and +4.4%, respectively.
• Laopu Gold ratingBuyThe table discloses a current price of HKD287.60, with price date 29-Jul-2026.
• Laopu Gold target priceHKD905Based on 20x FY26F P/E.
• Key downside risksA significant decline in gold prices, fashion risk above expectations, weaker-than-expected macro environmentFrom the report's valuation methodology and risk disclosure.

Impact & implications

The investment implication is that slower growth in Asia ex-Japan means China's high-end consumption remains in a differentiated recovery phase and cannot simply be extrapolated into a broad-based recovery in the near term; however, Hermes management's comments on growth and stabilization in China, as well as the relative resilience of wealthy customers and premium material categories, provide a positive read-across for Laopu Gold, which is positioned in premium gold jewelry.

Risks

• A significant decline in gold prices may weigh on Laopu Gold's earnings and valuation.
• Higher-than-expected fashion risk may affect product appeal and the sustainability of sales.
• A weaker-than-expected macro environment may further suppress discretionary consumption, especially demand from aspirational customers.
• Hermes' Asia ex-Japan revenue growth came in below expectations, indicating that the recovery in luxury demand in China and the region remains uneven.

What to watch

• Whether Hermes' China sales continue to grow in subsequent quarters and validate the stabilization cited by management.
• Whether revenue growth in Asia ex-Japan can recover further from 2.5% and approach or exceed market expectations.
• Whether the spending resilience of high-net-worth customers continues, and whether pressure on aspirational customers eases.
• Whether premium material-related categories such as jewelry and ready-to-wear continue to outperform less resilient categories.
• Changes in Laopu Gold's same-store sales, store expansion, gross margin, sensitivity to gold prices, and valuation multiples.