Following a decline of approximately 40% from its peak, LAOPU GOLD's stock appears to have entered a high-quality investment window. While market concerns persist regarding weak same-store growth, potential brand dilution from expansion, and the impact of falling gold prices on performance, the company's fundamentals remain robust. Same-store sales are projected to achieve double-digit growth of around 10% by 2026, driven by store upgrades, strong seasonal demand during the Spring Festival, and rapid membership growth. Domestically, the company adheres to a strict expansion strategy, opening stores only in premier shopping districts, with about 40 potential locations identified to support long-term growth without diluting the brand's exclusivity. Internationally, the inaugural Singapore store is achieving an annualized revenue of 1 billion yuan, with plans to expand to 8 overseas stores by 2030, potentially elevating LAOPU GOLD from a Chinese brand to a global one. Stress tests on gold price volatility further highlight the stock's valuation appeal. Even under an extreme downside scenario, the maximum valuation drawdown is only 21%, while a baseline upside scenario offers 47% potential gains. This asymmetric risk-reward profile, characterized by limited downside and significant upside, underscores the compelling investment value of LAOPU GOLD at its current low valuation.

Looking back at 2025, LAOPU GOLD was undoubtedly one of the most notable performers in the new consumer sector. Its differentiated luxury positioning and superior single-store profitability model propelled its stock price to surge over 20 times since its IPO. However, market sentiment shifted from exuberance to caution in the second half of 2025, leading investors to reassess the sustainability of its high growth, which resulted in a significant valuation correction. The current core concerns and debates primarily revolve around three dimensions: the sustainability of same-store growth, whether domestic and international expansion can serve as future growth engines, and the potential impact on performance if gold prices enter a downtrend. With the stock price having retreated about 40% from its high, the key question is whether the current price offers an attractive risk-reward profile. This analysis explores the reasonable boundaries of LAOPU GOLD's current valuation based on quantitative assessments and sensitivity analysis of these key assumptions.

The engine for same-store growth remains potent. After a period of rapid growth, LAOPU GOLD's store efficiency already significantly surpasses that of international first-tier luxury brands, with average annual single-store revenue reaching 4 to 5 billion yuan. Addressing concerns about high base pressure in 2026, it is projected that same-store revenue could achieve double-digit growth, potentially reaching a 10% year-on-year increase. This forecast is supported by a three-tiered logic. Firstly, store upgrades and new store maturation: In 2025, the company upgraded existing stores, relocating some from basement or secondary locations to prime ground-floor spots and expanding store areas from 60-100 square meters to 160-180 square meters or larger. Furthermore, all new stores opened in 2025 were situated in top luxury shopping districts, achieving high efficiency even during their ramp-up phase. As these new stores mature, their single-store revenue is expected to improve further in 2026. Secondly, validation from the Spring Festival peak sales season: The holiday period boosted demand, with promotions beginning before the festival and new product launches generating consumer enthusiasm. Social media reports indicated queues exceeding two hours at multiple stores. Based on research, LAOPU GOLD's performance during the Spring Festival, despite a high base in 2025, was significantly stronger than other industry brands, suggesting potential upward revisions to earnings estimates. Thirdly, accelerating membership growth: The number of loyal members continues to grow at an accelerating pace. Channel checks indicate that membership nearly doubled in 2025. Despite a cautious and strict store expansion policy, over 300,000 new effective customers have contributed to increased foot traffic at existing stores, with a repurchase rate maintained above 50%. This dual driver of significant new customer acquisition and high-frequency repurchases by existing customers should alleviate market concerns about declining single-store sales volume.

Domestic store expansion and overseas ventures represent long-term growth drivers. Regarding the domestic market and concerns that increased store openings might dilute brand scarcity, the core view is that this will not occur. LAOPU GOLD's exclusivity is not maintained merely by having few stores but is built upon extremely high channel thresholds. The company's expansion strategy is highly disciplined and stringent. As of the first half of 2025, all 36 domestic stores among the company's total 41 stores were located in top-tier core shopping districts. This strategy of only entering premier locations inherently preserves the brand's premium image. Future domestic expansion is expected to focus more on top-tier shopping districts in emerging first-tier cities, with potential also seen in airports and duty-free shops in major cities. Furthermore, LAOPU GOLD's exceptionally high single-store output and strong appeal to high-net-worth individuals make it a preferred tenant for major shopping malls during renovations. Based on a store location potential framework, approximately 40 potential locations have been identified in shopping districts, airports, and duty-free shops that already host international luxury brands, aligning with LAOPU GOLD's strict site selection criteria. Based on these potential locations, it is forecast that the number of domestic stores could reach around 59 by 2030, aligning with management's long-term target, with a steady annual net increase. Compared to other gold and jewelry brands, even 59 stores in China would not constitute an oversaturated presence, and the store count would still be relatively low compared to international top jewelry brands. Given the high barriers to entry for new stores, store expansion is viewed as a sustainable long-term growth driver that will not compromise brand scarcity.

In the overseas market, leveraging its profound Chinese cultural heritage and rising brand value, LAOPU GOLD has already garnered significant international attention. Several international celebrities have visited its stores and shared their experiences on social media, providing high-level endorsement that sets a strong foundation for global expansion. The company's overseas strategy uses Southeast Asia as a stepping stone. The performance of the first Singapore store, opened in 2025, has been impressive, with projected annualized revenue of 1 billion yuan. The prospects for continued expansion in Southeast Asia are positive due to three core factors: market growth in local jewelry consumption, a fragmented competitive landscape lacking dominant high-end brands, and a cultural affinity due to a large ethnic Chinese population. The company's prospectus mentions plans to open a second overseas store in Japan in 2026. Japan, with its blend of Eastern and Western cultures, represents a significant opportunity. Success in Japan could substantially alter LAOPU GOLD's narrative, transforming it from a "Chinese brand" into a "global brand," potentially paving the way for entry into European and American markets. It is projected that LAOPU GOLD could have 8 overseas stores by 2030, with potential markets including Singapore, Japan, Malaysia, Indonesia, Thailand, the United States, Europe, and the Middle East.

Sensitivity analysis regarding gold prices reveals the company's valuation appeal. To address market concerns about gold price volatility, the impact has been analyzed under four typical scenarios: a sharp short-term price increase, a moderate sustained increase, a decline from high levels, and a sustained downtrend. Under a sharp price increase, market hesitation could pressure traditional weight-based gold sales, while LAOPU GOLD's fixed-price model may offer relative value before adjustments, potentially boosting demand and revenue. However, a lag in the company's semi-annual price adjustment cycle could temporarily compress margins. During a period of moderate, sustained price increases, increased investment demand for gold would benefit revenue, and subsequent price adjustments would aid margin recovery. If gold prices retreat from highs, weight-based gold becomes more attractive initially, potentially diverting demand from fixed-price products, but lower costs would support gross margin expansion. In a sustained downtrend, the weakened investment appeal of gold would test the brand's premium pricing power, potentially hurting revenue. While lower costs might continue to support gross margins, operational deleveraging and inventory write-downs could squeeze net profit. In summary, a sustained bull market for gold would be beneficial, allowing the company to realize inventory revaluation gains and significantly boost margins. Within a narrow trading range, the strong brand premium should allow it to absorb volatility and maintain excellent performance. Regarding the risk of a significant gold price decline, scenario analysis suggests that even under a very pessimistic assumption, the maximum valuation drawdown is limited to approximately 21%, while the upside potential in a baseline scenario is around 47%. This asymmetric characteristic underscores an attractive risk-reward profile for investment at current levels.

In conclusion, since the second half of 2025, LAOPU GOLD's valuation has been under pressure due to fluctuating expectations for 2026, failing to reflect the premium typically accorded to a leader in ancient-method gold craftsmanship. However, strong sales data at the beginning of 2026 has already countered pessimistic market expectations, with LAOPU GOLD's performance far exceeding the industry average. Considering the continued strength of the same-store growth engine, the long-term incremental potential from both domestic expansion and global strategy, and the asymmetric risk-reward profile revealed by gold price stress tests, a stark contrast exists between the company's robust fundamental growth prospects and its current low valuation. This suggests that the present moment may represent an excellent window of opportunity for investing in LAOPU GOLD.