HK Stock Market Move | LAOPU GOLD (06181) rose more than 6% in the morning session. Institutions believe that the fixed-price gold category will benefit more from the rise in gold prices.

LAOPU GOLD (06181) rose more than 6% in early trading, rising 6.45% to HK$759 as of press time, with a turnover of HK$6.08 billion. CICC released a research report stating that the sales of traditional jewelry brands' weighted products have been significantly suppressed since the rapid rise in gold prices at the end of March 2024. However, data from some brands since 4Q24 show a narrowing of the sales decline on a month-on-month basis, and the trend of narrowing sales decline continues in 1Q25. Some popular jewelry brands have experienced significant sales declines in the early stage, but they still maintain a high proportion of dividends and high dividend yields. With the narrowing and turnaround of sales declines, these companies are expected to have opportunities for valuation recovery. The bank pointed out that products such as traditional gold and IP co-branded products are mostly priced at a fixed price, with low frequency of price adjustments, and sales benefit more in the context of rising gold prices. Shanxi also pointed out that in 2024, LAOPU GOLD benefited from brand awareness improvement, product iteration and new launches, with same-store sales doubling and positive operating leverage driving faster performance growth compared to revenue growth. It is expected that LAOPU GOLD's sales scale will continue to show strong performance in 1Q25, with same-store sales expected to grow rapidly throughout the year amidst the expansion of consumer groups, enhanced gold product categories, and store optimization. In terms of expansion and new store openings, the company will continue to rapidly expand its store network this year, with plans to increase store presence in the Shanghai market, and to open stores in Singapore and Japan.