Goldman Sachs: Maintains "buy" rating on LAOPU GOLD (06181) with a target price of HK$553.

Goldman Sachs released a research report stating that LAOPU GOLD (06181), in line with last month's profit warning, is expected to achieve a net profit of 1.473 billion yuan in 2024, at the upper limit of the profit warning range, a year-on-year increase of 254%, exceeding Goldman Sachs' expectations/market consensus of 4%/8%. This is mainly due to the strong growth in same-store sales bringing about sales performance improvement, but partially offset by higher employee stock ownership plan expenses and lower gross profit margins. Overall, the bank believes this is a solid performance report, maintaining a buy rating with a 12-month target price of HKD 553. The bank looks forward to obtaining more details at the performance briefing, including: 1. The specific reasons for the decline in gross profit margins in the second half of 2024 and the outlook and driving factors for gross profit margins in 2025; 2. The latest situation on store openings and renovation guidelines; 3. Investment strategies for 2025 and beyond, including brand building and product aspects, especially how to further enhance brand value and promote repeat purchases from loyal consumers; 4. Overseas development strategy.