Goldman Sachs: LAOPU GOLD's net profit in the second half of the year exceeds expectations, raising the target price to 1,168 yuan

Goldman Sachs released a report stating that LAOPU GOLD (06181.HK) announced its earnings forecast yesterday (11th), expecting full-year revenue for 2025 to be between RMB 27 billion and 28 billion, with net profit between RMB 4.8 billion and 4.9 billion, and adjusted net profit between RMB 5 billion and 5.1 billion. This implies that the net profit for the second half of 2025 will be between RMB 2.53 billion and 2.63 billion, which is 9% to 13% higher than Goldman Sachs' forecast and 5% to 10% higher than market consensus. In 2025, the company plans to open 10 new stores and optimize or expand 9 existing stores.

The firm indicated that the implied profit margin performance of LAOPU GOLD in the second half of 2025 will outperform market consensus expectations, considering the surge in gold prices and the company's price increase before the adjustment in October being less than the increase in gold prices; the stock price reacted positively after the announcement. Compared to Goldman Sachs' forecast, the implied net profit margin for the second half of 2025 is higher by 1.9 to 2.4 percentage points. The firm believes this is likely benefited by pre-prepared inventory and operating expense commitments increasing less than expected.

The firm raised its net profit forecast for LAOPU GOLD in 2025 to RMB 4.83 billion and increased its 2026 profit forecast by 4% to RMB 7.4 billion, reflecting an improvement in gross margin supported by more adequate price increases, pre-prepared inventory, and stronger-than-expected sales performance year-to-date. The firm maintains a "Buy" rating on LAOPU GOLD and raised the target price from RMB 1,128 to RMB 1,168