Laopu Gold Stock Price Drops Over 5% Amid Declining Gold Prices
Laopu Gold (06181) has seen its stock price drop by over 5% for the second time, reaching HK$365.4 as of press time. The trading turnover has reached HK$215 million.
The company's Q2 performance has been impacted by declining gold prices. According to Zhitong Finance APP, Laopu Gold recorded revenue of RMB 19.808 billion in the first half of this year, with a year-on-year increase of 60.3%. The net profit attributable to shareholders of the parent company was RMB 4.267 billion, up 88.2% year-on-year.
Estimating Q2 revenue and net profit based on previous announcements, analysts expect around RMB 2.3-3.3 billion in revenue and RMB 467-667 million in net profit. However, the second-quarter performance showed a significant sequential drop due to the rapid decline in gold prices.
Galaxy Securities notes that Laopu is currently in the affordable luxury segment with weaker pricing power compared to top international luxury brands. Its performance is strongly correlated with gold prices. JPMorgan still expects Laopu Gold's performance to gradually recover, forecasting profits of approximately RMB 800 million and RMB 1.2 billion for the third and fourth quarters, respectively.