The Pacific Securities: Maintains "Buy" rating on LAOPU GOLD (06181) with a target price of 806.52 Hong Kong dollars.

Pacific Securities released a research report, maintaining a "buy" rating on LAOPU GOLD(06181) with a 20x PE based on the 2026 performance, and a one-year target price of HK$806.52. As a leading domestic traditional gold brand, the company has deepened brand awareness in product design, cultural connotations, and service experience, constructing social identity and emotional value among high net worth individuals, while also possessing value preservation attributes. The company continues to seize scarce retail space resources in top commercial areas, maintaining a high-end luxury brand positioning, with the potential for brand momentum to continue to rise. With gold prices still high, continued store expansion and deep penetration of customer base are expected to drive high performance growth. Key points from Pacific Securities: Event The company released its 2025 interim report, achieving a taxable revenue of RMB 14.18 billion in 2025H1, a year-on-year increase of +249.4%, total revenue of RMB 12.35 billion, a year-on-year increase of +251.0%, net profit attributable to shareholders of RMB 2.27 billion, a year-on-year increase of +285.8%, and adjusted net profit of RMB 2.35 billion, a year-on-year increase of +290.6%. At the same time, the company announced a mid-term dividend of RMB 9.59 per share in 2025H1, totaling RMB 1.66 billion in dividends, with a dividend ratio of 73%. Same-store high growth, accelerated international layout Breakdown of revenue shows that in 2025H1, revenue from China Mainland/Overseas reached RMB 10.76 billion/RMB 1.60 billion respectively, with year-on-year growth of +232.8%/+455.2% respectively. In the first half of 2025, the company maintained the top position in average revenue and sales per square meter in a single mall in China Mainland among all jewelry brands. In June, the company entered Marina Bay Sands Shopping Center in Singapore, further expanding its overseas presence. In 25H1, offline stores/online platforms achieved revenue of RMB 10.74 billion/RMB 1.62 billion respectively, with year-on-year growth of +243%/+313% respectively. Looking at offline store performance, the company's offline stores achieved a revenue of RMB 10.74 billion, a year-on-year increase of +243%, with same-store revenue increase of +200.8%, achieving an average sales of about RMB 0.459 billion in a single mall. Steady expansion of store channels, basic coverage of top commercial centers, creating a high-end brand aura As of June 30, 2025, the company has opened 41 stores in 16 cities, all located in 29 well-known commercial centers including SKP series (6 stores) and Wanda Plaza series (11 stores), with the addition of opening 3 stores in 3 commercial centers in 25H1 (including Shanghai Global Harbor, Marina Bay Sands Shopping Center in Singapore, Shanghai IFC), and optimizing expansion by opening 2 stores in commercial centers where the company was already located (Lo Wu Wanda Plaza, Xiamen Wanda Plaza). The company has entered 9 of the top ten commercial centers in China, with the remaining commercial center, Shanghai Global Harbor, officially scheduled to open in October 2025. Meanwhile, the company's consumer base continues to expand. As of June 30, 2025, the number of loyal members has increased by 130,000 from the end of 2024 to 480,000, with an average overlap rate of 77.3% with consumers of international luxury brands such as LV, Hermes, Cartier, and Bulgari. Scale effect mitigates the impact of gold price fluctuations, steadily improving profit levels In 2025H1, the company's gross profit margin decreased by 3.2 percentage points to 38.1%. In the first half of the year, gold prices rose sharply, with a weighted average price increase of 21.53% from January to April 2025. The company only adjusted prices once in February, leading to a slight decrease in gross profit margin due to the rapid increase in gold prices. In terms of expenses, the company's sales/management expense ratios were 11.9%/1.7%, with year-on-year changes of -3.3/-1.8 percentage points respectively. With the boost of the scale effect, the net profit margin rose by 1.9 percentage points to 19.0% year-on-year. Risk warning: Weak consumer demand; gold price fluctuations; intensified market competition; slower than expected store openings.