Shares of LAOPU GOLD (06181) fell sharply during the trading session, dropping over 6% at one point. By the time of writing, the decline had moderated to 4.31%, with the stock trading at HK$452.6 and a turnover of HK$225 million.

The market movement follows stronger-than-expected U.S. non-farm payrolls data for May, which has fueled expectations of further interest rate hikes from the Federal Reserve. Spot gold prices have fallen below $4,330 per ounce, retreating more than 22% from the year's highs and erasing all gains made since the beginning of 2026.

It is noteworthy that the founder of LAOPU GOLD, Xu Gaoming, has repeatedly stated publicly that the company does not employ any hedging tools, including gold leasing or futures, to mitigate the risks associated with gold price fluctuations. He has explicitly stated that "engaging in hedging equates to abandoning the brand strategy" and emphasized that the company has no such plans. He advocates for offsetting the impact of gold price volatility by enhancing the brand's premium.

In a recent report, Citi significantly lowered its target price for LAOPU GOLD from HK$1,162 to HK$700. The bank believes that since gold prices began softening in February, LAOPU GOLD's pricing has commanded a significant 55% premium over traditional gold jewelry retailers. Furthermore, performance since the "618" shopping festival has been weaker than expected, potentially leading to the loss of price-sensitive customers. Consequently, Citi has reduced its revenue forecast for the 2026 fiscal year by 6% to RMB 37.7 billion, while maintaining its net profit expectation of RMB 8.26 billion.