LAOPU GOLD shares have extended their decline, dropping over 6%. At the time of writing, the stock is down 5.47%, trading at HK$345.8 with a turnover of HK$325 million.

The backdrop for this movement includes a recent pullback in the international gold price below the $4,000 per ounce level, leading to price reductions for pure gold jewelry by several domestic brands.

Analysts at Citigroup note that following a significant surge in the premium for LAOPU GOLD (HKEX: 06181) products—currently about 60% higher than traditional gold jewelry retailers—and the subsequent decline in gold prices, the company is experiencing attrition among its price-sensitive customer base.

China Securities (CSC) released a research report estimating that LAOPU GOLD's second-quarter revenue may see a year-on-year decline, likely due to the gold price correction. They project revenue for the period to be around RMB 5.1 billion, representing a 10% drop.

However, benefiting from previous price increases and lower inventory costs, the gross profit margin is expected to improve markedly, with net profit forecast to achieve positive growth.

Looking ahead to the second half of the year, China Securities (CSC) believes the second-quarter performance is highly likely to be the low point for the year, with a sequential improvement in third-quarter results anticipated.