An overview of the incident. On August 30, Laopu Gold released its 2024 semi-annual report. In 24H1, the company achieved revenue of 3.52 billion yuan, +148.3% year-on-year, and realized net profit to mother of 0.588 billion yuan, or +198.8% year-on-year.

The expansion of brand influence has led to an increase in stock store revenue and online and offline channel revenue. 24H1, the company achieved revenue of 3.52 billion yuan, +148.3% year over year, and gross profit of 1.455 billion yuan, +146.4% year over year. 1) View by channel: High-end store locations attract high-net-worth consumer traffic in line with brand positioning, and cover consumers across the country through online channels. 24H1, offline store revenue was 3.129 billion yuan, +149.6% year over year, online platform revenue was 0.391 billion yuan, +138.9% year over year. Online platform revenue accounted for 11.1%, which remained stable. 2) By product: The product portfolio covers all consumer groups of different ages and consumer needs, and pure gold and pure gold inlay products are widely loved. In 24H1, pure gold and pure gold inlay products achieved revenue of 1.372 billion yuan and 2.147 billion yuan respectively, compared with +110.1% and +182.1%. The share of pure gold inlay products in total revenue increased further to 61.0%.

Adhere to high-end brand positioning and expand brand market influence. 24H1. Revenue and gross profit growth are mainly due to:

1) The Group's brand influence has expanded, leading to continued growth in same-store revenue. 24H1, same-store revenue growth rate was about 104.2%. 2) Continuous optimization, promotion and iteration of the Group's brand products to promote continuous revenue growth. The company adheres to originality, attaches importance to product development, innovation and upgrading, ensures strict product quality control, and continues to launch characteristic products with remarkable competitiveness. By the end of 24H1, more than 1,800 original designs had been created, with 243 domestic patents, 1207 copyrights, and 164 overseas patents. 3) The market consumption concept has changed, and consumers prefer high-quality ancient gold products with prominent classical cultural connotations and product value. Old-fashioned gold has a first-mover advantage in the field of ancient handmade goldware. It not only provides jewelry for everyday wear, but also includes stationery, daily-use gold, etc., covering consumer groups of all ages and consumer needs. As of 24H1, the number of loyal members reached 0.275 million, and the consumer base continues to expand. 3) Compared with the end of 23H1, the company added 6 new stores and expanded the capacity by 1 store, which contributed to incremental revenue. By the end of 24H1, the Group had opened 33 self-operated stores in 14 cities, all located in well-known commercial centers with strict entry requirements, including SKP (4) and Vientiane City (10). On March 31, '24, the flagship store opened at Canton Road in Tsim Sha Tsui, Hong Kong, China. It has a construction area of over 1,000 square meters. It is currently the largest single store of Old Store Gold. It is also an important step in exploring the business model and internationalization of major stores.

Profitability continues to increase. 1) Gross profit margin: 24H1, the company's gross margin was 41.33%, -0.32pct year-on-year. 2) Expense rate: The sales expense ratio was 15.12%, -2.51 pct. Sales expenses were +113.0% compared to the same period last year. This is an increase in commission fees and rental expenses in shopping malls and platforms, which is consistent with the increase in store and online sales revenue and discount amortization, and is also related to store channel expansion; employee costs increased due to sales team expansion and salary increases; advertising in shopping malls and new media led to an increase in advertising expenses. The management cost ratio was 3.54%, -1.25 pct year on year; the R&D cost rate was 0.19%, -0.14 pct year on year; the financial cost ratio was 0.30%, -0.29 pct year on year, mainly due to the dilution of expenses due to rapid revenue growth. 3) Net interest rate:

24H1, net margin was 16.70%, +2.82 pct year over year.

Investment advice: Old-fashioned gold products are positioned at the high-end, attracting consumption from high-net-worth people, and there is still room for growth in the high-end business district. The company is expected to achieve revenue of 6.162, 7.885, and 9.49 billion yuan in 24-26 years, +93.8%, +28.0%, and +20.4%, respectively, to achieve net profit of 1.052, 1.369, and 1.671 billion yuan, respectively. The 30-day closing price corresponding PE is 13/10/8x, maintaining the “recommended” rating.

Risk warning: Risk of increased competition in the industry, fluctuations in gold prices or supply shortages, falling short of expectations in fund-raising projects, and large fluctuations in stock prices.