Editor’s Note
This article highlights Lao Pu Gold’s remarkable financial performance, with projected first-half net profit soaring by 279%–288% year-on-year. The surge is attributed to the company’s expanding brand influence and market advantage.
On the evening of July 27, Lao Pu Gold, known as a “big bull stock in new consumption,” announced that it expects its net profit for the first half of this year to be approximately RMB 2.23 billion to RMB 2.28 billion, representing a significant year-on-year increase of about 279% to 288%. The primary reason for this substantial growth is the significant market advantage formed by the continuous expansion of the group’s brand influence, leading to a substantial increase in overall revenue from both online and offline stores.
Since the beginning of this year, Lao Pu Gold’s stock price has continued to soar, once breaking through the HKD 1,100 per share mark. As of the close on July 25, its cumulative increase for the year exceeded 219%. However, recently, Lao Pu Gold’s stock price has been undergoing a continuous correction, with the latest price having fallen by over 31% from its yearly high. Some analysts suggest that the sharp rise in Lao Pu Gold’s stock price has, to some extent, already priced in performance expectations. If gold price volatility in the second half of the year or the pace of consumption recovery falls short of expectations, the risk of a valuation correction could increase significantly.
On the evening of July 27, Lao Pu Gold, known as the “first stock in ancient-method gold,” issued a positive profit alert on the Hong Kong Stock Exchange. It expects to achieve sales performance (including tax revenue) of approximately RMB 13.8 billion to RMB 14.3 billion (RMB, same below) for the first half of 2025, a year-on-year increase of about 240% to 252%; revenue of approximately RMB 12.0 billion to RMB 12.5 billion, a year-on-year increase of about 241% to 255%; adjusted net profit under non-IFRS measures (excluding the impact of share-based compensation) of approximately RMB 2.3 billion to RMB 2.36 billion, a year-on-year increase of about 282% to 292%; and net profit of approximately RMB 2.23 billion to RMB 2.28 billion, a year-on-year increase of about 279% to 288%.
In terms of stock price performance, since the beginning of this year, Lao Pu Gold’s stock price has continued to soar. On July 8, it once broke through the HKD 1,100 per share mark during trading. As of the close on July 25, the stock price was HKD 764.5 per share, with a cumulative increase of 219.5% for the year, and the latest total market capitalization reached HKD 132.011 billion. However, since July 9, Lao Pu Gold’s stock price has continued to weaken, with the latest price having fallen by over 31% from its yearly high.
Wind data shows that as of the end of the second quarter of this year, a total of 79 public funds held significant positions in Lao Pu Gold, an increase of 71.74% compared to 46 at the end of the first quarter, with 48 newly added as significant holdings. In terms of the number of shares held, they totaled 3.6263 million shares, an increase of 15.42% compared to 3.1417 million shares at the end of the first quarter, of which 1.3401 million shares were newly added as significant holdings.
According to its official website, Lao Pu Gold is the first brand in China to promote the concept of ancient-method gold and one of the earliest gold brands engaged in the branded operation of ancient-method handmade goldware. It differentiates itself with the Chinese court ancient gold-making craftsmanship, which holds intangible cultural heritage value.
In design, Lao Pu Gold adheres to traditional Chinese aesthetics, incorporating elements such as ancient patterns, mythological stories, and court styles. It also combines motifs like gourds (symbolizing fortune and prosperity), Ruyi scepters, and mandarin ducks, endowing products with different meanings.
Lao Pu Gold’s customer positioning focuses on the high-end segment. According to its prospectus, about 40% of Lao Pu Gold’s products have unit prices concentrated between RMB 10,000 and RMB 250,000, with a small portion priced above RMB 250,000. Products priced above RMB 50,000 contributed to over a quarter of its revenue. From 2023 to 2025, Lao Pu Gold was consecutively listed in the “Hurun Best of the Best – Chinese High Net Worth Individuals’ Brand Preference Report.”
According to Frost & Sullivan data, in 2024, among all well-known jewelry brands (including international and domestic brands), Lao Pu Gold ranked first in mainland China in terms of average revenue per store and sales per square foot, surpassing international jewelry brands such as Van Cleef & Arpels, Bvlgari, Cartier, and Tiffany.
At the current juncture, institutional divergence regarding the outlook for Lao Pu Gold is increasing. Some analysts point out that Lao Pu Gold’s current price-to-earnings ratio (TTM) exceeds 82 times, indicating that the stock price has, to some extent, already priced in performance expectations. If gold price volatility in the second half of the year or the pace of consumption recovery falls short of expectations, the risk of a valuation correction could increase significantly.
UBS stated in a research report that it estimates Lao Pu Gold’s inventory turnover period to be 3 months. Since gold prices rose 34% from January to April, while the company only raised prices by 10% in February, it is expected that the gross profit margin for pure gold products in the second quarter will decline compared to the first quarter. To alleviate gross margin pressure, the bank expects the company may adopt a more aggressive pricing strategy in the second half of the year, including raising prices for older products and launching more new products with higher premiums. If the rise in gold prices slows, the cost-performance advantage of the company’s products may gradually weaken, ultimately testing the appeal of its products and brand.
In contrast, Morgan Stanley holds a relatively optimistic outlook for Lao Pu Gold. A Morgan Stanley research report pointed out that it expects Lao Pu Gold’s growth in the second half of the year to accelerate compared to the first half, due to the accelerated rise in gold prices and strong demand in the second half. New store openings and rising gold prices will continue to support Lao Pu Gold’s stock price momentum.
Morgan Stanley raised its revenue forecasts for Lao Pu Gold for 2025 to 2027 by 13% to 18% and its profit forecasts by 19% to 25% to reflect the accelerated pace of new store openings this year. The target price was raised from HKD 865 per share to HKD 1,055 per share, maintaining an “Equal-weight” rating.
Goldman Sachs stated that the current market preference for consumer stocks shows significant divergence: on one hand, new consumer brands that can achieve differentiated growth amidst overall demand uncertainty continue to be favored by investors, as evidenced by their strong stock performance and valuation premiums; but on the other hand, investor expectations for such brands are constantly rising, and debates surrounding growth prospects for 2026 are also increasing. Short-term negative news may trigger selling pressure. For mature brands, demand uncertainty remains a primary concern for investors. However, Goldman Sachs believes that structural growth opportunities in the second half of the year will still drive consumer stocks to outperform the broader market overall.
