HK Stock Market Move | LAOPU GOLD (06181) drops over 3%; short-term sales performance still depends on gold price trends, with the dual festivals set to be a key observation point.

LAOPU GOLD (06181) dropped over 3%, down 3.1% as of press time, at HK$362.8, with a turnover of HK$401 million. On the news front, based on the first-quarter earnings forecast for this year, LAOPU GOLD's second-quarter revenue is estimated at approximately RMB 2.3-3.3 billion, with net profit of approximately RMB 467-667 million, representing a significant decline from the first quarter, affected by the rapid drop in gold prices during the quarter. Company founder Xu Gaoming has previously publicly emphasized on multiple occasions that the company does not use any hedging tools to offset gold price fluctuation risks. He believes that "hedging means abandoning the brand strategy," and advocates offsetting the impact of gold price fluctuations by enhancing brand premium. A JPMorgan research report pointed out that Laopu's second-quarter sales slowdown is more cyclical than structural. Although short-term sales performance still depends on gold price trends, and the Mid-Autumn Festival and National Day holidays will be the next key observation point, the bank believes the company's brand competitiveness and medium-to-long-term profitability remain solid.