Citi: Expects Laopu Gold (06181.HK) to increase discounts, putting pressure on gross margin; gives target price of HK$507 and "Buy" rating.

Zhitong Finance APP has learned that Citi released a research report stating that Laopu Gold (06181.HK) increased shopping mall promotional discounts in the third quarter of this year, which helped drive quarter-on-quarter sales growth, but the gross profit margin will also decline quarter-on-quarter; the bank currently gives a target price of HK$507 and a "Buy" rating. The bank assessed that third-quarter revenue needs to increase 18% quarter-on-quarter to RMB 3.9 billion in order to maintain the same net profit level as in the second quarter.