According to a research report, LAOPU GOLD (06181) maintains a "Buy" rating with a target price of HK$806.52, based on 20x PE for 2026 performance. As a leading domestic ancient gold craftsmanship company, the firm has deepened brand recognition across product design, cultural connotations, and service experience, building social recognition and emotional value among high-net-worth individuals while maintaining value preservation attributes. The company continues to secure prime retail locations in top-tier commercial districts, maintaining its luxury brand positioning, with brand momentum expected to continue rising. With gold prices remaining at high levels and accelerated store expansion plus deeper customer penetration, performance is expected to sustain strong growth.

**Key Developments** The company released its 2025 interim results, achieving tax-inclusive sales of RMB 14.18 billion in H1 2025, up 249.4% year-over-year. Total revenue reached RMB 12.35 billion, up 251.0% year-over-year, with net profit attributable to shareholders at RMB 2.27 billion, up 285.8% year-over-year. Adjusted net profit was RMB 2.35 billion, up 290.6% year-over-year. The company announced an interim dividend of RMB 9.59 per share for H1 2025, totaling RMB 1.66 billion in dividends, representing a 73% payout ratio.

**Same-Store High Growth, Accelerated Overseas Expansion** Breaking down revenue, Mainland China and overseas markets generated RMB 10.76 billion and RMB 1.60 billion respectively in H1 2025, up 232.8% and 455.2% year-over-year. In the first half of 2025, the company maintained its position as the top jewelry brand by average revenue per mall and sales per square meter in Mainland China. In June, it entered Singapore's Marina Bay Sands shopping center, further expanding its overseas footprint.

In H1 2025, offline stores and online platforms generated RMB 10.74 billion and RMB 1.62 billion respectively, up 243% and 313% year-over-year. Offline stores achieved total revenue of RMB 10.74 billion, up 243% year-over-year, with same-store revenue up 200.8% year-over-year, averaging approximately RMB 459 million in sales per mall.

**Steady Store Expansion, Coverage of Leading Commercial Centers** As of June 30, 2025, the company operated 41 stores across 16 cities, all located in 29 renowned commercial centers including 6 SKP locations and 11 MixC locations. In H1 2025, it entered 3 new commercial centers (including Shanghai Plaza 66, Singapore Marina Bay Sands, and Shanghai IFC) and opened 3 new stores, while optimizing and expanding 2 stores in existing commercial centers (Luohu MixC and Xiamen MixC). The company has entered 9 of China's top 10 leading commercial centers, with only Shanghai Plaza 66 remaining, which is scheduled to open in October 2025.

The consumer base continues to expand, with loyal membership growing by 130,000 to 480,000 as of June 30, 2025, compared to end-2024. The average overlap rate with consumers of international luxury brands such as LV, Hermès, Cartier, and Bulgari reached 77.3%.

**Scale Effects Mitigate Gold Price Volatility Impact, Profitability Steadily Improves** Gross margin in H1 2025 decreased 3.2 percentage points year-over-year to 38.1%. Gold prices rose sharply in the first half, with weighted average gold price increases of 21.53% from January to April 2025. The company only adjusted prices once in February during the first half, leading to margin compression due to rapid gold price increases. On the expense side, selling and administrative expense ratios were 11.9% and 1.7% respectively, down 3.3 and 1.8 percentage points year-over-year. Driven by improved scale effects, net margin increased 1.9 percentage points year-over-year to 19.0%.

**Risk Factors**: Weak consumer demand; gold price volatility; intensified market competition; slower-than-expected store openings.