On October 30, LAOPU GOLD's deadline for its planned H-share placement of HK$2.7 billion (HK$732.5 per share) arrived. Just two days prior, the 2025 Hurun Rich List revealed 376 new entrants, with LAOPU GOLD's Xu Gaoming and Xu Dongbo topping the newcomers with a fortune of RMB69.5 billion, placing them within the top 100.

According to the placement plan, 70% of the funds will be allocated to gold reserves—a higher proportion compared to previous placements. However, concerns loom as gold spot prices have dropped nearly 10% over the past week. LAOPU GOLD’s stock, which had rebounded to over HK$800, fell below HK$700 amid the placement announcement and gold price slump. Despite a slight recovery, the placement price remains higher than the current stock price as of October 30, creating an inverted scenario and casting uncertainty over the placement’s success.

Meanwhile, in the consumer market, LAOPU GOLD proceeded with its third price hike this year. The latest adjustment, significantly steeper than the 5%-13% increases in February and August, saw product prices rise by 18%-25%, with some items surging over 28%.

Consumers voiced frustration, citing examples like a "gold sachet" pendant that jumped from RMB110,000 to RMB130,000. "Such a steep increase is hard to accept," one customer remarked.

**"Unbearable" Price Surge** The October 26 price adjustment marked LAOPU GOLD’s steepest hike this year. A traditional gold bracelet, previously priced at RMB42,000, now costs RMB49,000—a RMB7,000 increase. Store staff noted a visible drop in foot traffic post-hike, with fewer inquiries.

LAOPU GOLD’s sales team defended the move, stating that while international gold prices rose ~60% this year, the brand’s cumulative increase (~50%) remained below market trends. Still, many consumers remain hesitant, wary of gold price volatility. Some speculate the hike aims to filter out less affluent buyers.

**Funding Gold Reserves** Alongside price hikes, LAOPU GOLD has aggressively raised capital. A HK$2.7 billion placement in May 2025 was nearly depleted by September, with only HK$10 million remaining. Similarly, its 2024 IPO proceeds of HK$960 million dwindled to HK$62.3 million by mid-2025.

Why such rapid spending? Financial reports show inventory surged from RMB4.1 billion in 2024 to RMB8.7 billion in H1 2025. The company stated that 70% of placement funds would bolster gold reserves, 10% for store expansion, and 20% for liquidity. Analysts suggest LAOPU GOLD’s aggressive stockpiling reflects both high-growth demand and bullishness on gold prices.

However, failure in the current placement could strain liquidity. H1 2025 operating cash flow was negative RMB2.2 billion, with further inventory purchases unlikely to reverse the trend. Rising gold prices also pushed costs higher, slashing gross margins from 42% (2024) to 38% (H1 2025).

Short-term debt more than doubled to RMB3.18 billion by mid-2025, while the debt-to-asset ratio climbed to 43.1% (vs. 38.1% in 2024).

**Betting on Gold** To counter margin pressure, LAOPU GOLD hiked prices again on October 26—its third this year—with increases exceeding 20%, even as gold spot prices fell 3% weekly.

Experts attribute this to "de-gold pricing logic," where brands offset price volatility by raising processing fees and shifting focus from weight-based pricing to cultural value. Yet risks persist: prolonged gold declines may dampen demand, while consumer trust could erode if prices diverge further from market trends.

LAOPU GOLD sells jewelry at fixed prices (like luxury goods), decoupling from gold price fluctuations. Founder Xu Gaoming openly dismissed hedging plans, doubling down on gold’s rise.

Industry insiders note that while brands like LAOPU GOLD and Chow Tai Fook use forward contracts to hedge, August 2025’s gold spike left them scrambling to cover spot market gaps—costs now passed to consumers.

Beyond placement uncertainty, LAOPU GOLD faces cash flow risks and margin recovery challenges.