LAOPU GOLD (06181) Surges Over 5% as New Year Holiday Sales Momentum Remains Strong; Citi Bullish on Profitability Continuation

Stock News
01/09

LAOPU GOLD (06181) rose more than 5%. As of the time of writing, the stock was up 5.12%, trading at HKD 656.5, with a turnover of HKD 1.003 billion. According to a Goldman Sachs research report, the firm recently invited LAOPU GOLD to its Asia-Pacific Consumer & Leisure Corporate Day. The company's management highlighted several key points, including that they observed no sales pressure following the October price increase for gold products and noted long queues in multiple cities during the holiday period. During the New Year holiday, both established stores and the company level recorded high double-digit to triple-digit year-on-year sales growth. Management believes that brand recognition, channel expansion, upgrades, and enhanced operational capabilities will support sales during the upcoming Chinese New Year peak season, with the company being better prepared in terms of inventory and operations compared to last year. Citi released a report stating that, based on the demand recovery and gross margin improvement observed during the New Year holiday, it has greater confidence in LAOPU GOLD's outlook for this year. Citi expects that consumers have digested the product price increases, supported by industry-wide price adjustments and the rebound in gold prices since last December. The report also mentioned that promotional activities during the long holiday stimulated the recovery in demand. The bank anticipates that this strong demand will continue through the Spring Festival holiday. Citi noted that LAOPU GOLD's gross margin has recovered to over 40% since late November last year, with potential for further price increases after the Spring Festival. The bank forecasts that the high profitability can be sustained throughout this year.

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