Laopu Gold: Weak gold prices weigh on 2Q26 sales, but Nomura maintains Buy

Overview

This report is Nomura's company update following Laopu Gold's investor call held on July 16, 2026. The core message is that 2Q26F sales are under pressure due to falling gold prices, leading to lower near-term earnings expectations; however, the company's operating initiatives are still advancing, including new products, store upgrades, and expansion of the VIC customer base. Nomura continues to view its long-term premium brand-building capability favorably and therefore maintains its Buy rating.

Core views

Nomura's core view is that short-term sales volatility does not change the long-term brand thesis. 2Q26 sales came in below expectations due to weak gold prices, but the company has already taken measures such as rebates and gifts, affordable new products, and promotions for high-tier customers to stimulate demand. If gold prices stabilize over the next few quarters, the market's pessimistic expectations for sales may ease. Meanwhile, store relocations, expansions, and upgrades should help increase service area and enhance differentiated shopping experiences, supporting improved consumer recognition.

Analysis framework

The report mainly analyzes management feedback from the investor call, company operating updates, revisions to earnings forecasts, and relative valuation methodology. On the earnings side, it lowers FY26F-28F revenue and net profit forecasts to reflect sales uncertainty caused by falling gold prices; on the valuation side, it uses FY26F P/E of 20.0x, close to the company's average F12M P/E since listing, with the Hang Seng Index as the benchmark.

Methodology notes

• Valuation methodsP/E multiple valuation

  FY26F P/E 20.0x

  The target price of HKD905 is based on 20.0x FY26F P/E, close to the company's average F12M P/E of 20.3x since its June 2024 listing; the previous target multiple was 22.5x.

• Earnings forecastForecast revision

  FY26F-28F revenue and earnings cut

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

• Rating systemNomura stock rating system

  Buy

  Nomura's Buy means the analyst expects the stock to outperform the designated benchmark over the next 12 months; in this report, the benchmark is the Hang Seng Index.

Asset mapping & comparison

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

• Laopu Gold (6181.HK)

  Core covered name, a Hong Kong-listed gold jewelry retailer.

  Strengths

  Clear premium brand positioning, continued improvement in consumer recognition; store upgrades expand service area and improve shopping experience; gross margin remains resilient.

  Weaknesses

  Sales are sensitive to changes in gold prices and consumer sentiment, and slower-than-expected 2Q26F growth led to cuts in revenue and earnings forecasts.

  Comparison

  The target valuation uses 20.0x FY26F P/E, close to the company's average F12M P/E of 20.3x since listing; the benchmark index is the Hang Seng Index.

  Risks

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

• Hang Seng Index

  The stock performance benchmark used in the report.

  Strengths

  Used to measure Laopu Gold's relative performance over the next 12 months.

  Weaknesses

  Does not represent the company's fundamentals and is used more as part of a relative return framework.

  Comparison

  A Buy rating means Nomura expects Laopu Gold to outperform this benchmark over the next 12 months.

  Risks

  Overall market risk and macro volatility may affect target price realization.

Key data

• RatingBuyMaintained unchanged.
• Target priceHKD905.00Cut from HKD1,114.00.
• Closing priceHKD350.00As of 2026-07-17.
• Implied upside+158.6%Calculated based on the new target price and closing price.
• FY26F revenue forecastCNY37,597mnPrevious forecast was CNY39,501mn.
• FY26F normalized net profit forecastCNY7,003mnPrevious forecast was CNY7,663mn.
• FY26F normalized EPSCNY39.70Previous forecast was CNY43.44.
• Target valuation multiple20.0x FY26F P/EPreviously 22.5x; the company's average F12M P/E since listing is about 20.3x.
• Market capitalizationUSD7,890.7mnAs disclosed in the report.
• 3-month average daily trading valueUSD70.0mnAs disclosed in the report.

Impact & implications

The report's investment implication is positive but more cautious: short-term declines in gold prices are weighing on sales and market sentiment, leading to cuts in both earnings forecasts and valuation multiples; however, if gold prices stabilize, a recovery in sales expectations could improve valuation sentiment. The company's efforts in products, promotions, store upgrades, and high-net-worth customer operations continue to sustain brand momentum, which remains a key support for the Buy rating.

Risks

• A significant weakening in gold prices may continue to weigh on sales and market expectations.
• Fashion risk higher than expected may affect product appeal and brand heat.
• A weaker-than-expected macro environment may suppress demand for premium jewelry consumption.
• If 2Q26 sales recover more slowly than management's measures imply, earnings forecasts may be further affected.

What to watch

• Whether gold prices stabilize over the next few quarters, and whether market pessimism about the sales outlook eases.
• The actual conversion effect after rebates and gifts, affordable new products, and promotions for high-tier customers are expanded to more boutiques in 2H26.
• Traffic and sales performance after the relocation, expansion, and upgrade of stores such as Shenzhen MixC World, Shanghai IFC, and Shanghai Plaza 66.
• Whether FY26F revenue, net profit, and gross margin meet the revised forecasts.
• Whether expansion of the VIC high-tier customer group can continue to improve brand recognition and ticket size performance.