LVMH's 2Q26 performance supports the view of structural growth in China luxury consumption; Nomura prefers China Resources Land and Laopu Gold

Overview

This report uses LVMH's 1H26 and 2Q26 results as a read-across to cross-validate Chinese luxury consumption, high-end shopping malls, and gold jewelry assets. LVMH's 1H26 revenue declined 3% YoY to EUR38.64bn, but organic growth was 2%; operating profit fell 4% YoY to EUR8.69bn, with an operating margin of 22.5%, above Bloomberg consensus of 21.9%. 2Q26 revenue was EUR19.52bn, with 3% organic growth, slightly above market expectations. The report believes the stable sales momentum of LVMH's key brands in China's high-end malls is consistent with its earnings performance, and that China's luxury consumption still has structural growth potential.

Core views

The core view is that LVMH's 2Q26 regional and segment data do not show a clear deterioration in Chinese luxury consumption; instead, they support the judgment that high-end consumer demand is resilient. Asia-Pacific excluding Japan maintained 4% organic growth, Fashion & Leather Goods returned to positive growth, and Watches & Jewelry grew 11%; these data points provide a positive read-across for China's high-end shopping malls and gold jewelry retail. Nomura is therefore positive on China Resources Land and reiterates its preference for Laopu Gold.

Analysis framework

The report uses a read-across approach: first breaking down LVMH's 2Q26 organic revenue growth at the group, regional, and business segment levels, and then combining this with expert channel checks at China's high-end luxury shopping malls in June to assess Chinese luxury consumption demand and the extent to which related listed companies may benefit. China Resources Land is valued using a discount to 2026F NAV, while Laopu Gold is valued using 20x FY26F P/E.

Methodology notes

• Earnings read-acrossRead-across

  Use the regional and category-level operating data of global luxury leader LVMH to validate the strength of China's consumer chain.

  Growth in dimensions such as Asia-Pacific excluding Japan, Fashion & Leather Goods, and Watches & Jewelry at LVMH is used as external evidence to judge China's high-end consumption, shopping mall traffic, and gold jewelry demand.

• Valuation methodNAV discount valuation

  China Resources Land's target price is based on 2026F NAV per share with a target NAV discount applied.

  The report discloses a target price of HKD32.60 for China Resources Land, based on 2026F NAV per share of HKD46.50 and a 30% target NAV discount, with HSI as the benchmark index.

• Valuation methodP/E multiple valuation

  Laopu Gold's target price is based on an FY26F P/E multiple.

  The report discloses a target price of HKD905 for Laopu Gold, based on 20x FY26F P/E, broadly in line with its average F12M P/E of about 20.3x since its June 2024 listing, with the Hang Seng Index as the benchmark index.

Asset mapping & comparison

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

• China Resources Land (1109 HK)

  A beneficiary asset of the recovery in China's high-end shopping malls and luxury consumption; the report rates it Buy.

  Strengths

  High-end shopping malls can benefit from stable sales momentum of luxury brands and Chinese consumers' willingness for high-end domestic spending.

  Weaknesses

  The target price is based on an NAV discount, and the currently disclosed price is slightly above the target price; commercial real estate performance is still affected by China's macro conditions and volatility in shopping mall operations.

  Comparison

  Unlike LVMH's direct brand operations, China Resources Land is more of a channel and commercial real estate asset, benefiting through luxury consumption traffic and tenant sales performance.

  Risks

  Uncertainty in shopping mall performance, continued weakness in China's macroeconomy, and weaker domestic luxury demand.

• Laopu Gold (6181 HK)

  A cross-beneficiary asset of gold jewelry and high-end consumption; the report reiterates its preference and rates it Buy.

  Strengths

  The target price implies substantial upside versus the disclosed price; the valuation method references its average F12M P/E since listing, while strong growth in the Watches & Jewelry segment provides an external read-across.

  Weaknesses

  The business is sensitive to gold prices, brand fashion attributes, and the consumer environment.

  Comparison

  Compared with traditional luxury goods, Laopu Gold is exposed both to gold prices and high-end jewelry consumption; LVMH Watches & Jewelry's 2Q26 organic growth of +11% provides a comparable demand reference.

  Risks

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

• LVMH Group (MC FP)

  The external read-across source of this report; not rated by Nomura.

  Strengths

  Global luxury leader, with 2Q26 organic growth slightly better than expected and the core leather goods segment returning to positive growth.

  Weaknesses

  1H26 total revenue and operating profit still declined YoY, and the Middle East conflict dragged on 1Q26 and 2Q26 organic growth by about 1ppt each.

  Comparison

  As an upstream brand owner and a barometer of global luxury demand, its data is used to assess China's consumer chain rather than as the main recommendation target of this report.

  Risks

  Regional demand divergence, impact from geopolitical conflicts, and flat consumption growth among European and Chinese customers.

Key data

• LVMH 1H26 revenueEUR38.64bn, -3% YoY, organic growth +2%Revenue declined at the group level, but organic growth remained positive.
• LVMH 1H26 operating margin22.5%, down 0.1ppt YoYAbove Bloomberg consensus of 21.9%.
• LVMH 2Q26 revenueEUR19.52bn, organic growth +3%Slightly above Bloomberg consensus of +2%; +4% excluding the impact of the Middle East conflict.
• 2Q26 regional organic growthUS +6%, Japan +14%, Asia-Pacific excluding Japan +4%, Europe roughly flatCompared with +3%, -3%, +7%, and -3% in 1Q26, respectively.
• 2Q26 segment revenue and organic changeWines & Spirits EUR1.32bn/+5%; Fashion & Leather Goods EUR8.90bn/+1%; Perfume & Cosmetics EUR1.88bn/-1%; Watches & Jewelry EUR2.78bn/+11%; Selective Retailing EUR4.36bn/+6%The core Fashion & Leather Goods segment ended its downtrend of the past two years and returned to positive growth.
• Chinese customer spendingRoughly flat YoY in 1H26Management said Chinese customers' domestic consumption willingness remained at historically high levels, but demand was more concentrated around specific shopping festivals or events.
• China Resources Land valuationBuy; target price HKD32.60; price HKD32.78 (27-Jul-2026)The target price is based on 2026F NAV of HKD46.50 and a 30% target NAV discount.
• Laopu Gold valuationBuy; target price HKD905; price HKD396.40 (27-Jul-2026)The target price is based on 20x FY26F P/E.

Impact & implications

In terms of investment implications, LVMH's data provides moderately positive external validation for China's high-end consumer chain. If Chinese consumers' willingness for high-end spending holds up and shopping-festival events continue to release concentrated demand, China Resources Land's high-end shopping mall assets and Laopu Gold's gold jewelry retail demand may benefit. However, macro weakness, softer luxury demand, falling gold prices, and fashion risk could still undermine the realization of the target prices.

Risks

• Continued macro weakness in China could cause shopping mall performance to fall short of expectations.
• Weaker domestic luxury demand could undermine the investment logic for China Resources Land's related commercial real estate assets.
• A significant drop in gold prices could affect Laopu Gold's earnings and valuation.
• Laopu Gold faces higher-than-expected fashion risk.
• The Middle East conflict dragged LVMH's organic growth by about 1ppt, and geopolitical disruptions may continue to affect travel and consumption flows.
• Chinese consumer demand is more concentrated around specific shopping festivals or events, which may bring volatility to sales cadence.

What to watch

• Whether LVMH's Asia-Pacific excluding Japan and Chinese customer consumption trends remain stable in subsequent quarters.
• Whether Fashion & Leather Goods can sustain positive growth, especially the sequential performance of brands such as Louis Vuitton, Dior, Celine, and Fendi.
• Whether the high growth in the Watches & Jewelry segment can continue, and how strongly it maps to China's gold jewelry consumption.
• Whether channel checks at China's high-end shopping malls continue to validate luxury brand sales momentum.
• China Resources Land's shopping mall operating data, occupancy rates, and tenant sales performance.
• Laopu Gold's same-store sales, store expansion, gold price trends, and changes in valuation multiples.