Laopu Gold's Adjusted Pricing Strategy to Support 3Q Growth
Dow Jones
Sep 22
0647 GMT - Laopu Gold's adjusted pricing strategy in 3Q is expected to boost sales compared with 2Q, with better operating leverage partly offsetting the resulting hit to gross margins, Citi analyst Tiffany Feng says in a note. Laopu has offered 15%-20% discounts during shopping mall promotional events in 3Q, versus 10% previously, Feng says. Citi's sensitivity test shows Laopu needs 18% quarter-on-quarter revenue growth in 3Q to 3.9 billion yuan to maintain its 2Q net profit of 667.0 million yuan. Citi maintains its buy rating and 507.00 Hong Kong dollar target price. Shares are down 1.4% at HK$363.60.
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