Key points of investment

The company's 2024H1 net profit is expected to grow 180% to 205% year on year: The company disclosed the 2024 H1 performance forecast. The company expects H1 to achieve net profit of about 0.55-0.6 billion yuan in 2024, with a year-on-year growth rate of about 180%-205%. Compared with the end of June 2023, the company added 6 new stores. The rapid increase in the company's net profit mainly comes from 1) high-quality ancient gold, which pays more attention to classic cultural connotations and product values at the industry level, is welcomed by more consumers; 2) the company's brand influence has further expanded, consumption has further expanded, and the same store has achieved relatively rapid growth, and at the same time, it has also contributed to the opening of new stores.

Ancient French gold specialty brands, positioned as high-net-worth customers, the proportion of mosaic products is still increasing, and the company's profitability is strong: Laopu Gold is a gold and jewelry brand with luxury attributes. The company has attracted the popularity of high-net-worth customers with ancient gold products and excellent customer service with both culture, fashion attributes and high quality customer service. The proportion of mosaic products is still increasing, showing good profitability in the current consumer environment.

The full direct management model covers many high-end shopping malls, with average store revenue far higher than traditional gold jewelry franchise stores: all Laopu Gold stores are directly managed, and the average store revenue and customer unit price are far higher than their peers. The company's current channels are mainly in high-end shopping malls in first-tier and new-tier cities. As of April 2024, Laosou Gold is one of the top ten high-end shopping malls in China (including Beijing SKP, Nanjing Deji Plaza, Beijing International Trade Mall, Shanghai International Finance Center, Shanghai International Finance Center, Shanghai International Finance Center, Shanghai Hang Lung Plaza, Hangzhou Tower, Hangzhou Vientiane City, Xi'an SKP, Guangzhou Taikoo Hui, and Chengdu International Finance Center) coverage 80%, ranking first among Chinese gold and jewelry brands.

Profit forecast and investment rating: Laopu Gold is the leading brand in the ancient French gold category in China. It has a good reputation among high-net-worth customers, and has maintained a good position in the industry with better product quality design and service. Gold prices have risen significantly since 2024, but the company can still maintain high pricing and profitability remains high. We raised the company's 2024-2026 net profit of 0.78/1/1.23 billion yuan to 1/1.48 billion yuan, corresponding to 2024- In 2026 PE was 13/10/9 times, covered for the first time, giving it a “buy” rating.

Risk warning: Terminal consumption is weak under consumption downgrade, risk of gold price fluctuations, expansion of the ancient gold category falls short of expectations, and opening a store falls short of expectations