Laopu Gold Slumps 4% on HK Market Amid Q2 Disappointment

Laopu Gold (06181) suffered a significant decline of over 4% in afternoon trading on HK's stock market, with its share price plummeting to HK$387.0 and turnover reaching HK$277 million as of press time.

The stock's underperformance is largely attributed to the company's second-quarter results, which showed a significant decline compared to the first quarter. According to JPMorgan Chase, the slowdown in sales is cyclical rather than structural, with the Mid-Autumn Festival and National Day holidays being key observation points for short-term sales performance.

Despite this, the bank remains bullish on Laopu Gold's brand competitiveness and medium-to-long-term profitability. It expects the company's profits to gradually recover in the second half of the year, rising from approximately RMB 600 million in the second quarter to around RMB 800 million in the third quarter and RMB 1.2 billion in the fourth quarter.

However, due to a high base effect, revenue and profits are expected to decline by approximately 24% and 21% year-on-year, respectively, in the second half of this year. The bank also estimates that the growth rate of offline same-store sales has bottomed out in the second quarter, with a narrowing year-on-year decline of 15-20% in the second half of the year.