Shares of LAOPU GOLD (06181) have fallen further, dropping over 5%.

At the time of writing, the stock was down 5.29% to HK$461.6 with a turnover of HK$1.88 billion.

Analyst Actions and Rationale

Citi recently issued a report in which it significantly lowered its target price for LAOPU GOLD from HK$1,162 to HK$700.

The bank noted that since gold prices began softening in February, LAOPU GOLD's pricing has shown a substantial premium of approximately 55% compared to traditional gold jewelry retailers.

Furthermore, the company's performance since the "618" shopping festival has been weaker than anticipated, which may lead to the loss of price-sensitive customers.

Consequently, Citi has reduced its revenue forecast for the 2026 fiscal year by 6% to 37.7 billion yuan, while maintaining its net profit expectation of 8.26 billion yuan.

Alternative Market View

In a separate research note, J.P. Morgan stated that LAOPU GOLD's share price has declined by 45% since the end of January.

The bank attributes this drop to investor concerns over uncertainties in same-store sales growth amidst volatile gold prices.

While gold price fluctuations in the second quarter may trigger a wait-and-see attitude among consumers, potentially pressuring same-store sales, J.P. Morgan believes the market is underestimating the company's proactive efforts to navigate the gold price cycle.