On July 2, Laopu Gold rose 3.12% in regular trading, trading at 348.4 HKD/share, with turnover of HKD 139 million. The stock rebounded after multiple consecutive days of sharp declines.

On the news front, multiple institutions recently issued supportive views on the company. CITIC Construction Investment maintained its Buy rating, projecting Q2 performance as likely the annual trough with sequential improvement expected in Q3. Although Q2 revenue is estimated to decline approximately 10% year-over-year to around RMB 5.1 billion due to gold price pullback, gross margin is expected to rise significantly to approximately 48%, benefiting from product price hikes of 25%-30% implemented in February and low inventory costs estimated below USD 4,200-4,300/oz. Net profit is still projected to achieve positive growth. UBS also noted that the stock has fully priced in sales pressure while margin improvement and free cash flow inflection remain underappreciated, with competitors representing only about 4% of its sales volume.

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