Furui: Lower target price of LAOPU GOLD (06181) to 981 Hong Kong dollars. High gold prices suppress gross profit.

Furui released a research report stating that it has lowered the target price of LAOPU GOLD (06181) from HK$1,103 to HK$981, corresponding to forecasted P/E ratios of 22 times and 17 times for 2026 and 2027, respectively. Despite facing pressure on profit margins, the bank expects LAOPU GOLD to see a recovery this year and has reiterated its "buy" rating. Furui forecasts that LAOPU GOLD's net profit in the second half of 2025 will be 2.3 billion RMB, a year-on-year increase of 155%, with sales revenue of 15.3 billion RMB, a year-on-year increase of 207%. The bank has revised down its net profit forecasts for LAOPU GOLD in 2025 to 2027 by 14%, 6%, and 12%, respectively, to reflect the lower gross profit margin due to high gold prices and the return to normal growth in 2027. Furui predicts that LAOPU GOLD will achieve a net profit of 2.3 billion RMB in the second half of 2025. In the mainland Chinese market, it predicts sales revenue of 13 billion RMB, a year-on-year increase of 188%, with the average sales per store increasing by 130% annually. In overseas markets, it forecasts sales revenue of 2.2 billion RMB, a year-on-year increase of 295%. During the period, the gross profit margin is expected to be 36.4%, compared to 38.1% in the first half of the year.