BofA Securities Lifts Laopu Gold Target Price Amid Competition Concerns

Bank of America Securities has raised its target price for Laopu Gold (06181.HK) to HK$399, a 14% increase from its previous forecast. However, the bank maintains a 'Neutral' rating on the company due to concerns over weak consumer sentiment and intensifying competition.

Laopu Gold's first-half adjusted net profit grew 84% year-over-year, meeting BofA Securities' expectations and the company's earlier profit guidance. The company faced significant headwinds in the second quarter, with international gold prices declining sharply after Laopu Gold's price adjustment in late February.

Laopu Gold's chairman, Xu Gaoming, noted that despite a notable pullback in second-quarter results, the company was able to maintain an average monthly profit of RMB 200 million (approximately NT$810 million). He emphasized the importance of not rushing into action during a crisis and highlighted the potential for a rapid rebound after a cyclical pullback.