Jingwu Financial News | Guo Zheng Guoji issued research reports, stating that Lao Pu Gold (06181) had revenues of RMB 3.28 billion and 35.2 billion yuan in the whole year of 23 and the first half of 24, respectively, with year-on-year growth of 145% and 148% respectively. The net income was 0.416 billion yuan and 5.87 billion yuan, with year-on-year growth of 342% and 198% respectively, showing a very strong growth momentum. The bank believes that Lao Pu Gold has the potential to become a luxury goods. If it can become a luxury brand, there is great room for imagination in terms of market space and pricing space.

The bank stated that the gold price has risen rapidly this year. Taking SEG Gold 9999 as an example, it has now reached 623 yuan/gram, up 28.9% from the beginning of the year. Gold has had an annualized return rate of 5.68% in the past ten years, so it is currently in a relatively fast-growing stage. In the long term, as an inflation-resistant asset, the upward trend of gold price will remain unchanged. This is also the logic behind supporting gold consumption. In addition, the continuous demand for gold consumption brought by China's marriage and gift-giving customs. The bank also believes that the company's high-end positioning minimizes the impact of short-term fluctuations in the gold price on its performance.

The bank initiated coverage with a target price of HK$235 and a 'buy' rating for the first time. The bank believes that Lao Pu Gold has created a unique competitive advantage, with good development potential in the domestic high-end gold jewelry sector, currently with a small scale but promising future growth. The bank expects net income for 24/25/26 to be 1.12/1.45/1.78 billion yuan, corresponding to EPS earnings of 7.1/9.3/11.3 Hong Kong dollars.