LAOPU GOLD (06181) experienced a sharp decline in the pre-market trading session on Monday, with its stock price plummeting 9.13% following the announcement of a new gold tax policy in China. The dramatic drop reflects investor concerns about the potential impact of these regulatory changes on the gold industry and LAOPU GOLD's operations.

The new policy, jointly issued by China's Ministry of Finance and the State Taxation Administration, aims to clarify gold-related tax policies and implement differentiated tax management. According to Guosen Securities, this move is designed to reduce speculative behavior in the gold market while standardizing operations and promoting healthy industry competition. However, the immediate market reaction suggests that investors are wary of potential negative effects on gold-related businesses.

CITIC Securities Research has indicated that the new policy could lead to higher prices for gold jewelry for end consumers, although the extent of the increase will depend on cost pass-through by gold jewelry manufacturers. This potential price hike, coupled with measures to curb market speculation, appears to be driving the selloff in LAOPU GOLD's shares. As the market digests the implications of these regulatory changes, investors will be closely monitoring how LAOPU GOLD and other players in the gold industry adapt to the new landscape.