Bank of America Securities: Cuts LAOPU GOLD (06181) target price to HKD 350, second-quarter earnings disappoint expectations.

Bank of America Securities released a research report stating that based on the earnings forecast for LAOPU GOLD (06181) in the first half of the year, the revenue and profits for the second quarter have significantly slowed both year-on-year and quarter-on-quarter. According to the median estimate, revenue in the second quarter fell by 23% year-on-year, while net profit remained flat year-on-year, with quarterly revenue and profit down 82% and 83%, respectively. The firm believes that the weakness in revenue has been partially offset by improved profit margins, as the decline in gold prices should boost the gross margin to over 40%. Considering that the second quarter is typically a low season for gold and jewelry demand, combined with the possibility of more promotional activities and new products being launched in the second half of the year, they currently expect revenue and profits in the third and fourth quarters to improve quarter-on-quarter, and noted that if gold prices stabilize, it may release some pent-up demand. Bank of America Securities has lowered its profit forecasts for LAOPU GOLD for the years 2026 and 2027 by 15% and 20%, respectively, to 6.7 billion and 7.3 billion RMB, and reduced the target price from 774 HKD to 350 HKD, reiterating a Neutral rating.