Citi has reaffirmed its Buy rating for LAOPU GOLD (06181), setting a price target of HK$1,162 and identifying it as the top pick in China's jewelry sector. The bank highlighted that the company's preliminary first-quarter results significantly exceeded expectations, with revenue reaching between RMB 16.5 billion and RMB 17.5 billion, more than doubling year-over-year. This performance already represents 41% to 44% of Citi's full-year 2026 revenue forecast and 45% to 47% of market expectations.

The report noted that investors are currently focused on future sales momentum following recent gold price volatility, as well as discussions around potential financing activities, which have exerted pressure on the stock's near-term performance. However, Citi's scenario analysis supports its above-consensus earnings projections and indicates sufficient inventory to meet short-term sales demand.

Despite anticipating pressure on demand from price-sensitive customers—who accounted for approximately 40% of first-quarter revenue, or about RMB 7 billion—due to the significant decline in gold prices, Citi's pessimistic scenario suggests that even a complete loss of this revenue segment would still result in LAOPU GOLD achieving around RMB 37 billion in revenue for the year, indicating limited downside risk. The target price of HK$1,162 corresponds to a 2026 forecasted price-to-earnings ratio of 24 times.