JP Morgan: Expects LAOPU GOLD (06181) performance to gradually rebound, maintains "Overweight" rating.

J.P. Morgan's research report states that LAOPU GOLD (06181) experienced a slowdown in sales during the second quarter, which is more likely attributed to cyclical rather than structural issues. The company's gross margin exceeded expectations, and its strategy for coping with fluctuations in gold prices has become clearer. Additionally, expansion in VIC and overseas can enhance mid-term growth visibility, while liquidity and dividends also offer downside protection for the company. The bank maintains an "Overweight" rating on the company, with a target price of HKD 891. J.P. Morgan still anticipates that LAOPU GOLD's performance will gradually rebound, estimating profits of approximately RMB 800 million and RMB 1.2 billion for the third and fourth quarters, respectively. Although short-term sales performance remains dependent on gold price trends, the Mid-Autumn Festival and National Day holidays will be the next key observation points, the bank believes that the company's brand competitiveness and its medium- to long-term profitability remain robust.