HK Stock Market Move | LAOPU GOLD (06181) is currently down over 5%. Bank of America Merrill Lynch predicts that the company's gross profit margin in the second half of last year both fell compared to the previous year.

LAOPU GOLD (06181) is currently down more than 5%, as of the time of writing, it is down 5.14% to HK$729.5, with a trading volume of HK$2.38 billion. Bank of America Securities released a research report stating that LAOPU GOLD has benefited from the rise in gold prices and continuous brand penetration. The company is expected to see strong revenue growth in the second half of last year, with a year-on-year increase of 165% to RMB 13.2 billion; adjusted net profit reached RMB 2.4 billion, a year-on-year increase of 169%. The full-year adjusted net profit forecast has been revised down by 5% to RMB 4.8 billion, representing a year-on-year increase of 218%. However, Bank of America believes that due to the increase in the proportion of low-margin products of LAOPU GOLD, along with an increase in discount frequency and challenges in inventory management, the company's gross profit margin is still under pressure. It is estimated that the gross profit margin of LAOPU GOLD in the second half of last year was 37.1%, a decrease of 4 percentage points from the previous year, and a decrease of 1 percentage point from the first half of the year. The bank has lowered LAOPU GOLD's target price from HK$958 to HK$860.