Everbright Securities released a research report highlighting LAOPU GOLD (06181) as a pioneer and leader in China's ancient-style gold jewelry market, with a high-end positioning and long-term expertise. Since 2023, accelerating gold price increases have boosted consumer demand for gold as an investment and store of value. Ancient-style gold, with its understated elegance and collectible appeal, has seen rising popularity, driving LAOPU GOLD's performance to record highs.

Using relative and absolute valuation methods, Everbright Securities set a target price of HK$804.64, with 2025–2027 target P/E ratios of 27x, 20x, and 15x, respectively, initiating coverage with a "Buy" rating. Key insights include:

**Ancient-Style Gold Thrives as Gold Consumption Trends Younger** Despite weak overall gold jewelry consumption amid rising prices, niche segments like ancient-style gold and "Guochao" (national trend) concepts have grown against the trend. China's gold product market reached RMB 568.8 billion in 2024, with ancient-style gold's share rising from 4% in 2018 to 30% (RMB 157.3 billion) in 2023. By 2028, it is projected to account for 52% (RMB 421.4 billion). Gold consumption is no longer limited to traditional occasions like weddings or birthdays but has become a fashion statement, appealing to younger demographics while carrying emotional and cultural significance.

**Differentiated Positioning with Leading Craftsmanship** 1) Unlike mass-market gold brands offering homogeneous products, LAOPU GOLD competes in the premium ancient-style gold segment. As of June 2025, its customer base overlapped with luxury brands like LV, Hermès, Cartier, Bvlgari, and Tiffany by 77.3% on average, with ~480,000 members. 2) Years of refinement have endowed LAOPU GOLD with superior craftsmanship, creating a strong brand moat. Its products command higher premiums, with H1 2025 gross and net margins at 38.1% and 18.4%, respectively, outperforming peers.

**Aesthetic Leadership and Omnichannel Growth** LAOPU GOLD’s success stems from: 1) Designs blending Eastern and Western cultural elements, aligning with the "New Chinese Style" trend and making gold a daily fashion accessory. 2) Strategically located high-end stores with exquisite displays, reinforcing its luxury image. Despite limited outlets, same-store sales doubled or more in 2023, 2024, and H1 2025. 3) Online expansion with lightweight, affordable items attracting younger customers, complementing offline growth.

**Earnings Forecast and Valuation** 2024 revenue surged 167.5% YoY to RMB 8.506 billion, with net profit up 253.9% to RMB 1.473 billion. H1 2025 revenue and net profit grew 251.0% and 285.8% YoY. Projected 2025–2027 revenue: RMB 26.74/36.17/46.09 billion (+214.4%/35.2%/27.4% YoY); net profit: RMB 4.76/6.54/8.45 billion (+223.3%/37.3%/29.2% YoY). EPS estimates: RMB 27.00/37.08/47.90, with current P/E at 21x/15x/12x.

**Risks**: Gold price volatility, intensified competition, and store expansion delays.