Pacific Securities: Maintains Buy Rating for LAOPU GOLD (06181), Expected to Continue High Growth Momentum.

The Pacific Securities released a research report stating that LAOPU GOLD (06181) is expected to achieve revenues of 33.9 billion, 37.37 billion, and 41.26 billion yuan from 2026 to 2028, representing year-on-year growth of +24%/+10%/+10%, and realize a net profit attributable to the parent company of 6.56 billion, 7.11 billion, and 7.93 billion yuan, with year-on-year growth of +35%/+8%/+12%. The corresponding P/E ratios are 9x/8x/7x, maintaining a "Buy" rating. The company released its semi-annual report for 2026, achieving sales revenue (including tax) of 22.78 billion yuan in the first half of 2026, a year-on-year increase of +60.6%, with revenues of 19.81 billion yuan, a year-on-year increase of +60.3%, and a net profit attributable to the parent company of 4.27 billion yuan, a year-on-year increase of +88.2%. The main points from Pacific Securities are as follows: Online and overseas high growth leads, gold products open new growth pole By channel, in the first half of 2026, the company's stores and online channels achieved revenues of 17.509 billion and 5.270 billion yuan, respectively, with year-on-year increases of +43.5%/+171.9%, indicating continuous expansion of the consumer demographic in the online sector. By region, in the first half of 2026, revenues in mainland China and outside of mainland China were 16.491 billion and 3.317 billion yuan, respectively, with year-on-year increases of +53.3%/+107.8%, highlighting the strong growth potential of the overseas market. On the product side, the company insists on innovation, launching works such as gold lacquerware and gold enamelled dragon-patterned cups, with gold product sales achieving triple-digit percentage growth in the first half of 2026, while literary and art gold items gradually become a new growth pole. Existing stores improve quality and efficiency, deepening the high-end consumer mindset As of June 30, 2026, the company has opened 45 self-operated stores in 16 cities, maintaining the same number as at the end of 2025, with a shift in focus toward optimizing existing stores and overseas expansion. The company plans to optimize 10-12 stores in 2026, having already completed the optimization of 6 stores, relocating them to prime mall locations and expanding operational areas to further support the high-end brand positioning. In the first half of 2026, average sales performance per mall exceeded 500 million yuan, with store efficiency ranking first in mainland China. In terms of customer base, as of June 30, 2026, there were approximately 730,000 loyal members, an increase of 120,000 or about 20% compared to the end of 2025. The overlap rate with consumers of the five major international luxury brands such as LV, Herms, and Cartier has increased to 84.6%, continuously consolidating the mindset of the high-end consumer group. Gross margin returns to high level, profitability and cash flow improve simultaneously In the first half of 2026, the company's gross margin was 41.3%, up 3.2 percentage points year-on-year, primarily benefiting from low-cost inventory reserves, product price adjustments, and the marginal contribution from revenue growth. On the cost side, the ratios of selling, administrative, and financial expenses were 11.1%, 1.5%, and 0.5%, respectively, with year-on-year changes of -0.8/-0.4/+0.2 percentage points, indicating good expense control. In terms of operations, the net operating cash flow in the first half of 2026 was 2.008 billion yuan, a significant recovery from -2.215 billion yuan in the same period last year, indicating a marked improvement in operational quality. Investment recommendation As an absolute leader in traditional gold crafting methods in China, the company builds a strong brand barrier relying on intangible cultural heritage craftsmanship, Eastern cultural core, and luxury service experience, continuously enhancing the social recognition and emotional value binding among high-net-worth individuals, combined with the inherent value retention properties of gold. The company strategically positions itself in the core markets of first-tier and new first-tier cities, continually seizing scarce commercial space in top-tier shopping centers like SKP and MixC, further solidifying its positioning as a top luxury brand. In the first half of 2026, the gold products category opened a second growth curve, with overseas markets doubling, and existing stores improving quality and efficiency, while membership and high-end consumer mindset continue to deepen. Although growth slowed temporarily in the second quarter of 2026 due to a drop in gold prices and preemptive demand effects, the performance growth momentum remains robust, driven by store optimization, deep penetration of high-net-worth consumer groups, and significant growth in online and overseas markets, with a high probability of continuing the positive growth trend. Risk warnings: Weak consumer demand; gold price fluctuations; intensified market competition; slower than expected store openings.