LAOPU GOLD (06181) fell more than 5%, declining 4.93% to HK$539.5 at the time of writing, with a turnover of HK$319 million. In early Asian trading on May 18th, spot gold (London gold) briefly fell below $4500 per ounce, hitting its lowest level since April.

A Citi research report noted that investor concerns over the slowdown in LAOPU GOLD's same-store sales growth are already reflected in its current valuation and earnings forecasts. Citi's analysis suggests that the same-store sales performance at LAOPU GOLD's Beijing SKP store is relatively volatile. This is primarily due to a higher proportion of daigou shopping activities, which typically represent price-sensitive customers, and the timing of promotional events. Consequently, the store tends to outperform other locations during upward trends and underperform during downturns.

The report stated that given the limited downside risk to LAOPU GOLD's earnings, the relatively positive investor reaction indicates there is still room for upward re-rating of the stock. Citi views the 618 online promotional period from May 15th to June 20th as a potential upside catalyst and has initiated a 30-day positive catalyst watch.

Previously, Goldman Sachs pointed out that the company's management plans to upgrade 8 to 12 stores in mainland China and open 5 to 6 new stores outside mainland China this year. Goldman Sachs expects consumer sentiment to gradually recover if gold prices stabilize.