Nomura has issued a research report reiterating its 'Buy' rating on LAOPU GOLD (06181) and maintaining its target price at HK$1,114, stating the company's current risk-reward profile remains attractive.

The stock of LAOPU GOLD has declined 24% year-to-date, underperforming the Hang Seng Index by 17.4 percentage points and also lagging behind some Chinese gold jewelry peers such as Chow Tai Fook (01929). The firm attributes this primarily to increased gold price volatility since March 2026—a contrast to the robust rally seen from mid-2023 through 2025—and a capital market preference for technology and AI themes over consumer stocks.

The stock currently trades at a forward price-to-earnings ratio of just 9.9 times for the 2026 fiscal year. The firm believes the downside risk of potential sales slowdown due to gold price fluctuations is largely priced in. If gold prices stabilize in the coming months, aided by a potential Middle East peace agreement and an improving geopolitical climate, the market's pessimistic sentiment regarding LAOPU GOLD's second-half sales could ease.

Nomura further noted that despite facing gold price volatility, LAOPU GOLD adhered to its established growth strategy in the second quarter, including launching new products, upgrading boutiques, and expanding its high-net-worth client segment.

The firm views the company's recent boutique relocations and expansions at Shenzhen MixC World, Shanghai IFC Mall, Shanghai Plaza 66, and Singapore's Marina Bay Sands shopping mall positively. Store upgrades not only expand service areas to accommodate more customers but also provide a differentiated shopping experience through newly appointed in-store after-sales service managers. In the long term, enhancing boutique locations and increasing floor space will help elevate the brand's profile.

Nomura has kept its revenue and profit forecasts for LAOPU GOLD unchanged for the 2026 to 2028 fiscal years.